The NWM Blog
Written by Northwest Mortgage
Published on Fri, May 22, 2020, Last Updated on Sun, Nov 1, 2020
Buying your first home can go both ways – bad and good. You want your first-time home buying experience to be good. You don’t want to get lost in the maze of homes shown before you; you want to be prepared from the start.
For first-time homebuyers, starting on the wrong foot can derail their chances of landing a great home. Instead of buying a home that meets their requirements and preferences and is within their budget, they might get their hands on a bad home — one that is overpriced with a host of problems that start to appear with time.
No need to worry! We won’t let you make the wrong choice and will help you get the keys to your dream home. The following tips for first-time homebuyers will help you take your first step in the right direction.
1. Know How Much You Can Afford
If you house hunting without a figure in mind, you’ll only put a distance between you and your dream home. You’ll spend your time looking at houses that you can’t afford or tour homes that don’t make your list of ideal homes to buy.
Your objective is to buy a home and obtain a loan with an affordable and practical monthly payment plan. Use a mortgage calculator to find out the price range you can afford. Just input the loan amount, interest rate, and monthly or yearly amortization duration.
2. Ensure There Are No Errors in Your Credit Report
Before you apply for a loan, check your credit report for errors, fixing any error that you come across. Mortgage lenders approve your request for a loan and set an interest rate based on your credit report. Errors in your credit report can cause the lenders to quote you a high interest rate instead of an interest rate that you really should get.
You can get a free credit report from the three free credit report bureaus, Equifax, TransUnion, and Experian. A mortgage lender looks for a credit score of 620 or higher to approve you for a mortgage loan, 620 or higher for Federal Housing Administration loans, and a credit score of 760 or higher for a mortgage loan with a low interest rate.
3. Do Not Use up All Your Savings
When you buy a home that has been lived in, the chances of having an unexpected repair problem are very high. Even if you perform a home inspection before buying a home, you’re only ensuring that there’s no big repair problem down the line. However, even smaller, unexpected problems can collectively become bigger and expensive. Here’s what we suggest: Save money for a down payment, closing costs and moving expenses, and minor repairs. You can get an idea about the amount you need to put aside for moving and repairs by asking the mortgage to provide you closing costs estimates.
4. Get a Pre-Approval From a Mortgage Lender Before House Hunting
You can get a pre-approval for a home before you go house hunting. A pre-approval tells you the maximum amount you can borrow and the terms and conditions and information regarding the home. If you think this would be an understood point, you’d be surprised to know about how first-time homeowners tend to forgo this step.
You can contact a mortgage company to discuss getting pre-approved for a home. The mortgage lender reviews your expenses and income. Knowing this information can help you make a more competitive bid, as it will show the seller that you aren’t just stating an amount, but can back up the bid.
Who can help first-time homeowners get pre-approved for a loan and make house hunting a breeze? Northwest Mortgage can! Contact us today! Let’s get you pre-approved for your dream home!