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Buying a home for the first time is an exciting and daunting prospect. There are many things to consider and it can be hard to know where to start. Do you want a fixer-upper or a turnkey home? What kind of neighborhood do you want? What can you afford?
Well, purchasing a home is a huge investment one of the biggest you will ever make. It's a complex process that involves a lot of paperwork, research, and negotiation. If you're a first-time home buyer, it's helpful for you to have a checklist of what you need to do to make sure everything goes smoothly. From getting pre-approved for a mortgage to understanding the ins and outs of a home inspection, this will help you avoid stressful surprises during the purchase process.
While every home purchase is different, here are a few things you need to consider as a first-time home buyer for a successful transaction:
1. Look at Your Finances
While this might seem like a no-brainer, looking at your finances before you start searching for homes is quite important. This will give you a good idea of how much house you can afford, which property types you should be looking for, and identify any red flags that might need to be addressed.
2. Know Your Credit Score
Aside from government-backed loans, most mortgages will need you to have a credit score of 620 or more to get approved. Make sure your credit report is free of errors and get your scores from each of the three major credit reporting agencies. If your scores aren't high enough, you should consider taking steps to improve them.
Besides, your debt-to-income (DTI) ratio should not exceed 43%. The DTI is a measure of how much you earn compared to the debt you are paying. The lower the ratio, the higher your chances of getting approved for a house.
3. Get Pre-approved
Before you start looking at homes, you must have a pre-approval letter from a lender. Pre-approvals are typically issued in just a few days, but can take longer during busy housing markets or if the lender is not actively advertising its loan programs. This will eliminate any guesswork on your part and help narrow down your list of properties.
4. Consider Hiring a Real Estate Agent
Sure, it's possible to buy a house on your own and save money. But unless you have extensive knowledge of the housing market and extensive experience researching properties, you will be wasting a lot of time.
You need to understand that each home that meets your needs will be different from the last and knowing this before you start searching is key. You'll need an agent who'll help you find exactly what you want for a fair price not only in terms of numbers, but quality as well.
5. Consider the Location
It's important to understand the ins and outs of the neighborhood you want to buy in. The location is not only important for your everyday activities, like where your kids attend school, it is also a major factor in how much money you can save on housing costs.
A good real estate agent will be able to help you identify the best areas where they are located, how they compare with other neighborhoods, and how far it will take your commute.
Let First Savings Mortgage Help you get a Mortgage Seamlessly
Getting a loan for a first-time home buyer can seem so overwhelming. The First Savings Mortgage Team is here to help and make sure all of your needs are met from application to closing. We will remove the burden of you having to repeatedly provide data, sending multiple applications, and waiting for lenders to approve or deny your loan.
As a full-service mortgage company, we offer options and suggestions to help people refinance and obtain financing for their homes. If you need a mortgage, contact us today; we understand your time is valuable and will work with you in order to make the process as seamless as possible.
Please note, by refinancing your existing loan, your total finance charges may be higher over the life of the loan.