It’s not every day that you buy a house and there is nothing like the experience of being able to own a home. The home-buying process for first-time buyers can seem daunting. However, there is nothing to fear. Everyone goes through these feelings when they do this process for the first time but it is important to remember that buying a house is a huge achievement. Here are some of the top fears that most first-time homeowners deal with and some things to remember so those fears can be eliminated.
How Do I Choose the Right Real Estate Agent?
Many first-time homeowners understand that they are going to need help in the home buying process. How do you know that this person has your best interests in mind? You should look for someone who has experience in real estate and a working knowledge of the area where you are looking to buy. It is also important to choose a real estate agent that you feel you can trust.
Ask for referrals and interview at least three candidates. Do not be afraid to follow up with the ones you are interested in and ask more questions. Make sure that the agent is licensed properly and ask about the commission. You don’t want surprises at the close. A competent real estate agent is well worth their commission and will be able to give you honest and straightforward answers to your questions.
What Should I Look For When Hiring a Mortgage Lender?
Having a good relationship with a mortgage lender is one of the most important aspects of the home buying process. Although most agents have a preferred lender in mind, that doesn’t necessarily mean you are obligated to use them.
A big mistake that a lot of first-time homeowners make is choosing a mortgage lender only based on the interest rates they offer. In order to get a good interest rate, you need to have a good credit rating. Your credit rating is the most important factor in determining interest rates. A good mortgage lender will guide you through all the loan options and approved processes. They will keep you informed about the status of your loan, and answer any questions that you may have.
How Do I Figure Out My Budget?
Mortgage lenders can offer something called a pre-approval. This is a tool that can help you discover the perfect price range for you, so that you can begin your home search with all the knowledge you need. Another amazing benefit of getting a pre-approval is that your offer may get accepted by a seller much faster than a potential buyer who is not already pre-approved. Once you are pre-approved, closing can be done faster since you only need to complete the title search, home appraisal, and final approval. This will appeal to the home seller and may be just the trick to get you started on homeownership.
What Do I Do if I Have a Bad Credit Score?
If you want the best interest rates, you must have a high credit score. A good credit score indicates that you do not present a high risk to your mortgage lender because you are reliable on payments and indicates you have the ability to pay. This increases your chances of getting approved for a loan.
Your mortgage lender will be able to access your credit score with your permission and provide more information. They can also give you tips on improving your credit if it isn’t where it needs to be. You don’t have to be discouraged if you aren’t approved. Don’t be discouraged if you aren’t approved! With some research and advice from your lender, you can find some companies that can help you even with a low credit score.
What if I Can’t Afford the Down Payment?
There are some programs offered to first-time homeowners by the Federal Housing Administration that have down payment requirements of as low as 3% of the total cost of the home! If you are a veteran, a surviving spouse, or an active member of the military, there are loans available that do not require a down payment. There are even loan programs that allow down payments that are gifted to you. Do not be afraid to ask your lender about grants and other assistance programs for first-time homeowners. That’s what they are there for!!
How Stressful is the Loan Application Process For First-Time Homeowners?
If you hire a good mortgage lender, they will be the ones to lead you through all of the steps of the loan application process, including prequalification, underwriting, and closing. They will give you a list of all the items that they need in terms of documentation. This includes W-2s for the last two years, payment slips from the previous 30 days, and copies of statements for checking, saving, or any other assets.
Be aware that you may be asked to provide updated copies of some documents and this is completely normal. Make sure you keep your lender updated at all times as your final loan approval could change based on your final situation. This is why it is recommended to hire a mortgage lender based on how trustworthy and reliable they are rather than whether or not they have the best rates.
You will not have to go through this process alone. Having the help of realtors and mortgage lenders will make the home buying process so much easier. You have plenty of options and will be able to successfully go through the process like so many other first-time home buyers have done! Call a trusted real estate agent near you today to begin the process of buying your first home.