So, you’ve decided to buy your first home – congratulations! Becoming a homeowner is an accomplishment that’s both rewarding and empowering. But before you can begin shopping for your dream home, you’ll need to do some planning and preparation.
For most people, buying a home is the largest purchase they will make in their lifetime. The majority of buyers finance this large purchase with a mortgage loan. Contrary to popular belief, finding and applying for a mortgage doesn’t have to be a complicated process. If you’re a first-time home buyer, follow this guide to make your purchasing experience a success.
Start saving for a down payment
A down payment refers to the percentage of a home’s purchase price that you pay at the closing of the mortgage loan. How much you’re required to put down for a down payment depends on the mortgage loan type and varies by lender. Some loan programs make it possible to finance a home with little to no money down. However, the more you can afford to pay for your home upfront, the less you’ll need to borrow. Lenders may also offer more attractive interest rates to borrowers who make a more substantial down payment. It’s always a good idea to start setting aside money for a down payment once you’ve decided to buy a home.
Clean up your credit score
Your credit score plays an important role in your ability to be approved for a mortgage loan. Before applying for a mortgage, take a closer look at your credit report to clean up any inaccuracies or errors that may be harming your credit. If your score is lower than you’d like it to be, take steps to improve it by paying bills on time and reduce credit card balances. After applying for a mortgage loan, avoid opening any new credit accounts such as a credit card or auto loan until your loan closes to prevent your score from dropping.
Get a mortgage pre-approval
Before you go house hunting, it’s a good idea to get a pre-approval on a mortgage loan. After checking your credit and other documents, the lender will give you a pre-approval letter detailing how much you’re approved to borrow. While a mortgage pre-approval letter isn’t required, it helps show sellers that you’re a serious buyer ready to make an offer on their home. By getting pre-approved, you’ll have a clearer understanding of your financial situation and more bargaining power when it comes to making an offer on the home of your choice.
Seek help from the experts
At times, the home buying process can seem stressful or overwhelming, especially for first-time buyers. Remember that you don’t have to navigate the tricky waters of real estate alone. Working closely with an experienced, knowledgeable loan officer can make all the difference in your home buying experience. Loan officers act as a liaison between the lender and borrower and are responsible for providing buyers with expert advice and guidance from pre-approval to closing.
Are you ready to take the first step in your journey to home ownership? The licensed loan officers at River City Mortgage are standing by to answer your questions and walk you through the process step by step. We’ll help you find the right mortgage that fits your needs, whether you’re a first-time homeowner or a seasoned buyer. Getting started is easy! Contact us today to learn more about your financing options and begin the pre-approval process.