Attention first time home buyers! Spring is upon us and sooner then we will expect, with it will bring more homes coming up on the market. So the best thing to do if you are looking to purchase a home this year is get ready, get set and go!
To get set you will need to start lining your ducks in a row. You will want to review your credit score (FICO) to see if you are in a good position or if you will need to clean a few things up (freeannualcreditreport.com). You will also need to look at your budget and start reviewing what you can afford for a monthly mortgage payment (including taxes & insurances). Then you will need to see how much money you can put down and if you have any funds for down payment and closing costs. I would advise planning to put a minimum of $5000 in the bank before looking to get pre-approved, even if you are looking into down payment assistance programs or if you have a gift from a family member. You will want to be prepared for earnest money, inspection & appraisal, those are upfront costs that you will need to have readily available when you start looking at homes. At best if you end up not needing all those funds you will want to have them for your new home. If you have been used to renting you may have overlooked that now with a house you will need to have a lawn mower, garden hose, curtains, furniture, etc. and of course back up funds in case something should need repairs, you’re a home owner now.
Once all these are set and in place then you will want to “go” look to get pre-approved with a mortgage lender. Remember rates are going to be comparable from lender to lender, you will need to analyze what is important to you and what you are looking for in a lender. To some it may be important to have a local lender or maybe one that specializes in first time home buyers. Whatever your specifications, just make sure you feel comfortable and confident with them.
Here are some quick questions you should ask a lender:
- How long have you been in the business?
- Are you licensed?
- Are you local?
- Do you charge for a pre-approval?
- Do you have references that I could reach out to regarding your services?
- Why would I choose you over other lenders?
- Do you offer multiple loan programs such as FHA, VA (if applicable), USDA (if applicable) & Conventional loans? Do you have down payment assistance programs (if applicable)? How about renovation loans? **It is always important to know that a lender is able to work with multiple programs because you may end up needing to go a different direction and if they can’t offer a program that can help you then you are left with finding another lender and you may not have enough time to do so.
Once you are pre-approved then it is literally “go” time! Start looking at houses! The main thing is that if you are looking to purchase this year take the time to review your budget, review your credit and if you are needing to file your taxes and use your refund for down payment, then now is the time to prepare!
If you have any questions and would like to know where to begin please give us a call.
