If you are thinking of buying a home, you probably have been getting your finances for some time. First-time homebuyers need the right information to avoid making big mistakes when they purchase their homes. The leap into home ownership is a big one, and you’ll want as much information with you along for the ride. Below, you’ll find a crash course on mortgages for first-time homebuyers.
Every homebuyer needs to prepare ahead of time for the process to be smooth. Research different lenders in your area and see what their rates are. If you talk to your lender about your goals and what type of loans you’re looking for, you’ll understand all of the costs that you’ll face ahead of time. You don’t want any surprises when it comes to signing a contract for a home.
Every Mortgage Is Different
It’s easy to think that all home loans are created equal, but they aren’t. The diversity in types of home loans is why you need to research and meet with a lender ahead of time. Talk to your real estate agent and see who they suggest. Your agent is a useful resource because they want your entire transaction to go smoothly for everyone involved. There are many different kinds of mortgages, and you need to make sure you’re getting the loan that’s right for you. Be sure you understand the specifics of each loan before you sign on.
What You Need In Order
Before you even head into the home buying process, there are a few things that you’ll need including:
- Cash for a downpayment
- A budget
- Knowledge of all of your finances
- Where you’d like to look for a home
- An idea of how much you can spend on a home
- Information to get pre-approved including tax returns, proof of income, and bank statements
Once you have saved up cash for a downpayment, it’s time to take a look at your budget. Can you afford a monthly mortgage payment in the price range that you hope to buy? How much money will you have left over each month? Should you adjust your expectations?
You’ll need to save up a bit of cash before you know that you’re ready to buy a home. It’s recommended that you have at least 20 percent of the purchase price of a home to put down towards your loan. The more you put down, the lower your monthly payments will be on the mortgage. So saving is the next big step in securing a mortgage in the smoothest possible way.