There are several ways you can prepare before starting the process of buying your first home. The mortgage professionals at Hypotec enjoy working with first-time home buyers.
Five tips to get first-time home buyers ready for the mortgage process:
1. Start Working on Your Credit Score as Soon as Possible
The credit score has a significant impact on the mortgage decision. Make sure you pay off or pay down your credit cards- the higher your available credit and the lower your utilization, the higher your credit score will be. It is recommended that you review your credit reports from all three major agencies: Equifax, Experian, and TransUnion, for at least 3-6 months before connecting to a loan professional. When reviewing your credit reports, you want to look for errors such as old debts you've paid off or items and information that isn't yours. You will need to take steps to dispute all mistakes. Changes to your reports take time to resolve, so start early.
2. Do Not Finance Anything New Before Buying a Home
Financing a major purchase before you get a mortgage reduces your loan availability amount. It could also negatively impact your credit score since a new large purchase will increase utilization. It's best to stay away from other large purchases when you're about to make the biggest purchase of your life.
3. Get Pre-Approved
A mortgage pre-approval means a loan adviser will look at all your finances to gain perspective on your purchasing ability, including your income, debt, assets, and credit history, to determine how much money you can borrow. They'll also advise how much you could pay per month and what your interest rate would look like. Think of it as getting a recognizable medal for being a suitable candidate for a mortgage. You then take that pre-approval letter you receive to show sellers that a lender is willing to work with you.
4. Understand Your Loan Options
With various mortgage options, the type of loan you choose will determine several important things: the amount of your down payment, what type of home you can buy, and more. At Hypotec, our loan officers work with you to find the best loan option for your specific situation.
The most common loan types:
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Conventional loans are the most typical type of home loan, allowing a variety of downpayment options with an advantage to eliminate mortgage insurance with a 20% down payment.
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FHA loans allow you to buy a home with less strict financial requirements and lower credit scores. These loans are for low-to-moderate-income borrowers who may be unable to make a sizeable down payment.
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VA loans are exclusively for veterans, members of the armed forces, National Guard, and qualified spouses.
Every loan type has its own qualifications that you must meet, and the loan officers at Hypotec will walk you through the process of finding the perfect loan for your unique situation.
5. Be 100% Committed To A Loan
The most valuable tip for first-time home buyers that we can offer is to be sure you are ready for the financial commitment. Be sure that you're ready for homeownership before you take on a mortgage so that you're satisfied with the purchase and enjoy your home long-term.
If you feel overwhelmed when thinking about buying a home, the best thing to do is to talk to a mortgage professional. The mortgage professionals at Hypotec can help answer all your questions. With Hypotec's new way of lending, we can narrow down the home shopping process by helping you uncover what kind of mortgage you can qualify for.
Contact Hypotec today at
844-497-6832 to start your home buying process! Our digital mortgage technology makes applying for a mortgage quick, easy, and secure; it ensures our clients the best loan customized to their specific needs.
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