Home buying is an exciting venture, especially if you are doing it for the first time. However, there a number of ways you can be mislead if you do not have proper guidance or know how. It would be beneficial to have at least some ideas on the most common mortgage tips for first time buyers.
First, there are various benefits available for first-time homebuyers, but a number of issues related to obtaining a loan can be very confusing if they are not approached correctly. However, doing a little homework by yourself beforehand will save you from walking into unforeseen pitfalls.
Here are a few tips that are most valuable for first-time buyers.
In order to qualify for the loan, you need to make sure that your credit score is within the required range. If you do not know where you stand with respect to your credit score, you can find out through websites like AnnualCreditReport.com. These websites can generate up to three different reports from separate bureaus free of cost.
For an additional fee, you can also find out the exact numeric value of your credit score. Basically, your score depends on the use of credit according to the credit limit. Check and double-check these reports for underlying mistakes, unpaid debts and accounts or collection accounts. A damaged credit report decreases your chance of qualifying for a loan. This process should be started at least half a year before you begin shopping for a home, so that you have some time on hand to repair damages on a report, if any.
Before buying a home, you should have a clear idea about the payments that you will have to make in the future. Your lender will require the mortgage money every month without fail and for that reason you need to research on the basics of mortgage lending. In some cases, your monthly pay at the end of the month may be on a commission basis, but that reason does not excuse you from paying your mortgage on time. According to most State laws, a self-employed or independent contractor will have to provide a reliable two-year earning history in order to qualify for the loan.
Keeping records of your income tax return reports, bank statements, etc is absolutely essential if you hope to qualify for a loan. Mortgage lenders require authentic and require complete documentation from at least the last two years.
(READ: What Documents Do You Need for FHA Loan Qualification)
Usually, FHA loans are flexible in the down payment amounts, especially for first-time buyers. However, even this amount can be a little overwhelming for a young person or couple. Before finalizing on the mortgage lender, make sure you research the market. Ask friends, co-workers and neighbors to guide you to reliable and understanding mortgage lenders. Make sure you have all your doubts regarding the process cleared before you embark on this quest!
If you have any questions or queries, feel free to contact us at FHALoanSearch and we will be happy to provide you with the assistance you need!