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Top Tips For First Time Home Buyers
Top Tips for First Time Homebuyers!
Stay on Top of Your Credit!
The homebuyer’s credit score is among the most important factors when it comes to qualifying for a loan these days.
“In addition, the standards are higher in terms of what score you need and how it affects the cost of the loan,” says Mike Winesburg, formerly a mortgage planner with McKinley Carter Wealth Services in Wheeling, West Virginia.
Scour the reports for mistakes, unpaid accounts or collection accounts.
Just because you pay everything on time every month doesn’t mean your credit is stellar, however. The amount of credit you’re using relative to your available credit limit, or your credit utilization ratio, can sink a credit score.
The lower the utilization rate, the higher your score will be. Ideally, first-time homebuyers would have a lot of credit available, with less than a third of it used.
Repairing damaged credit takes time — and money, if you owe more than lenders would prefer to see relative to your income. If you think your credit may need work, begin the repair process at leastsix months before shopping for a home.
Evaluate Your Assets and Liabilities…(Debt to Income Ratio)
So you don’t owe too much money and your payments are up to date. But how do you spend your money? Do you have piles of money left over every month, or are you on a shoestring budget?
A first-time homebuyer should have a good idea of what is owed and what is coming in.
Additionally, buyers should have an idea of how lenders will view their income, and that requires becoming familiar with the basics of mortgage lending.
For instance, some professionals, such as the self-employed or straight-commission salesperson, may have a more difficult time getting a loan than others.
Theself-employedor independent contractor will need a solidtwo years’ earnings history to show.
Organize Your Documents
When applying for mortgages,homebuyers must document income and taxes.
Typically, mortgage lenders will requesttwo recent pay stubs, the previoustwo years’ W-2s, tax returns and the pasttwo months of bank statements — every page, even the blank ones.
“Why it has to be every single last page, I don’t know. But that is what they want to see. I think they look for nonsufficient funds or odd money in or out,” says Floyd Walters, owner of BWA Mortgage in La Canada Flintridge, California.
Buying a home can take a long time, but knowing what you need and where to find it can save time when you’re ready.
Probably the biggest step in the home buying process in contacting a mortgage lender. Picking the right lender will help the process run smoothly and without a hiccup. Please contact me for a list of qualified lenders to help you out on your journey to home ownership!
Gather your Down Payment.
It takes effort to scrape together the down payment.
There areprograms that can assist buyerswith qualifying incomes and situations.
“I’ve helped arrange assistance loans for $10,000, which are interest- and payment-free, and forgivable afterfive years. Although considered a loan, they’re more like grants. Other programs can provide up to $40,000 interest-free,” Winesburg says.
“Each state is different, but most of this money comes from the HOMEInvestmentPartnership Program, which is a federal block grant to create affordable housing,” he says.
Finally, speak with mortgage lenders when you’re starting the process. Check with friends, co-workers and neighbors to find out which lenders they enjoyed working with and ask them questions about the process and what other steps first-time homebuyers should take.
Always enlist the help of an experienced REALTOR to help you through the process, negotiate on your behalf and find your dream home!!
Call me today to set up a buyer consult to get the ball rolling! I am here and eager to meet with you at your convenience. The process is much easier than you may think!
Justin M. Coleman with Randolph Realty Group, 912.660.8824
***Information taken from BankRate.com