Are you preparing to purchase your very first home? If so, you’re probably very excited to start your home search.
Before you get things going, though, it’s important for you to make sure that you’re going to be able to qualify for your first home buyer loan. You’re probably not going to be in a position to pay cash for a house, so you’ll need to get approved for a first time home buyer loan to ensure you’re able to get a mortgage.
Doing this is sometimes easier said than done. As you might expect, lenders aren’t always in a huge hurry to extend loans to those who don’t meet certain first time home buyer loan requirements.
But with a little bit of hard work on your part, you shouldn’t have too much trouble securing the loan that you need. You might even be able to get access to first time home buyer loans with zero down!
Here are five tips that’ll put you in the perfect position to obtain your first home buyer loan.
1. Begin by Improving Your Credit Score as Much as You Can
Where does your credit score stand as of right now? If you’re not 100% sure, you should kickstart your first home search by finding out what your credit score is.
If you discover that your credit score is on the lower side, you should then work to try and improve it as much as you possibly can prior to trying to purchase your first home. You can do this by:
- Getting current on any debt payments you may have fallen behind on
- Paying down some or even all of the debt that you have
- Keeping credit cards with a $0 balance on them open
You might also want to see if there are any errors on your credit report. If there are, it could be having an adverse effect on your credit score. By disputing these errors, you can improve your credit score and improve your chances of getting approved for your first home buyer loan at the same time.
2. Attempt to Get Pre-Approved for a Mortgage Before You Start House Shopping
Once you have your credit score in a good place, the next thing you should do as far as trying to qualify for your first home buyer loan is look to get pre-approved for a mortgage. This is a great step for people to take since it’ll let them know how much a lender would potentially give to them to buy a home.
To get pre-approved for a mortgage, you’ll need to provide a lender with information on your income and your monthly expenses. You’ll also usually need to give them access to your credit report.
A lender will then respond by pre-approving you for a mortgage. It’ll indicate what amount of money you could borrow from them later for the purpose of buying your first house.
3. Get Ready to Put Down a Sizeable Downpayment, If Possible
As we alluded to earlier, there are some lenders that will set people up with first time home buyer loans with zero down. But this isn’t always going to be the case.
You may need to be prepared to put down some money to purchase your first home. You can increase the odds of you getting approved for a mortgage by having a sizeable downpayment handy.
Generally speaking, many lenders like to see people prepared to put down 20% of the purchase price of a home. It’ll suggest that they’re fully invested in buying a home and ready to go about doing it.
4. Find a Home You Like and Apply for a Mortgage for It
After you’ve been pre-approved for a mortgage and decided how much of a downpayment you want to put down on a home, you can begin shopping for a house. You’ll want to look for a house that you love that will fit nicely into your budget.
When you find one, you can then put an offer in on it and look to work out a deal with a seller. And from there, you’ll be able to formally apply for a mortgage for it.
While getting pre-approved for a mortgage is a relatively quick process, getting approved for an actual mortgage is a little more time-consuming. You’re going to need to send a bunch of personal information to a mortgage company so that they can decide whether or not they want to extend a mortgage to you.
Make sure you send them all the info that they ask for. You might have to go back and forth with them a few times until they approve you for a mortgage.
5. Shop Around for the Best First Time Home Buyer Loans
Buying a house is one of the biggest investments that you’re ever going to make. So you should not settle for a mortgage that doesn’t have the best terms attached to it.
If you’re not happy with the interest rate on the first home buyer loan that a mortgage company sends you, try going through a different one. In fact, try going through several of them so that you know you’re getting the best first time home buyer loans.
You have the freedom to accept whichever mortgage comes back with the most favorable terms attached to it. It’ll prevent you from paying more than you should have to for a house in the end.
You Can Quality for Your First Home Buyer Loan When You Play Your Cards Right
Buying your first home can be exciting. But it can also be very overwhelming and stressful for a lot of people.
Use all of the tips found here to help you take out your first home buyer loan. By following the steps that we’ve laid out, you should be able to get your hands on a good loan that will allow you to pay down your mortgage as fast as possible.
Would you like to obtain more tips on buying your first home? Read the articles on our blog to find some additional advice.