How Do I Buy My First Home?
There are a few things you'll need to know when buying your first home. It's not like you can go right from your apartment to a house on a hill with a white picket fence. Buying your first house will take time, effort and patience. It will also take the work of some experts behind the scenes, like a mortgage consultant and a real estate agent. Let's answer the question "How do I buy my first home?"
The first step in buying your first home needs to be mortgage pre-approval. This will help you figure out how much of a monthly house payment you can afford, which tells you what kinds of homes and neighborhoods you should focus your attention. It also lets a real estate agent know that you're a serious, qualified buyer. Too many first time home buyers begin with the house hunting process, without knowing their financial standing.
This step also helps you understand your options. For instance, did you know that a HomePath mortgage would help you find a (likely) inexpensive Fannie Mae-owned home where the seller - Fannie Mae - can kick in closing costs and your down payment is 3%? Or did you know that there's a mortgage option that allows you to finance 100% of the home price depending on the location of the house? That's called the USDA Rural Development loan. Mortgage pre-approval should include some of these discussions so you know your options.
Mortgage pre-approval also gets you set on your credit score. Knowing your score (and whether it's a good credit score for a first time home buyer) will help you set up a time table on when you'll be ready to buy. If you need a bit of a hand improving your FICO score, you can do this so you get a better interest rate or qualify for a mortgage in the first place. Preparation is key.
Once you have your mortgage pre-approval and you've settled on a trusted real estate agent, it's time to start planning the kind of first home you'd like. Now that you know about your mortgage options and you have a budget, you might look for a house in the country. Or maybe you want a fixer-upper at a good price. This home could be a stepping stone in your life, or it may the house you stay in until your kids go to college. Whatever your desires, this is the fun part: house hunting.
During the house hunting process, make sure you're not making any big changes to your financial life. This means no new credit cards, no store credit (even though furniture stores would love it if you bought all new accessories for your future home) and try not to change your job. Keeping your credit portfolio the same during this process will help ensure your pre-approval stays good. If changes do come your way, talk to your mortgage consultant right away.
Education is key. Download the free guide "Get Mortgage Ready Kit" at the button below. From credit scores to down payments to all the mortgage and home buying terms, it's all in this free eBook. Get yours at the button below.
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