Skip to content

Preliminary Steps for First-Time Home buyers

May 1, 2012

Preliminary Steps for First-Time Home Buyers

The tips compiled below relate to the initial stages of the home-buying process. Many first-time home buyers think that the process begins when they start shopping for a house. This is not the case. There are some preliminary steps you must take before you look at your first house.

Advance preparation tips for first-time home buyers:

Start a housing fund.

You’re going to need money to cover a variety of things when buying a house. You’ll have to make a down payment of some kind, unless you use the VA loan program or the FHA program. You’ll also encounter closing costs and moving expenses. These days, some mortgage lenders are requiring additional cash reserves beyond the items we just covered. The sooner you start saving money for this process, the better off you will be later on.

Clean up your credit report.

Your credit report is a historical record of how you have borrowed and repaid the money in the past. This information is used to produce your credit score, which is used by mortgage lenders when considering you for a loan. Negative information in your credit report can result in a lower score. This can hurt your chances of getting a home loan. All first-time home buyers should review their credit reports for errors and inaccuracies.

Here’s how to do it.

Check your credit score to see where you stand. This is a particularly important topic for first-time home buyers in 2012. Mortgage lenders are requiring higher credit scores today then they did in the past, during the housing boom. If your score is below 600, you may have trouble qualifying for a home loan.

You can learn more here.

As a first-time home buyer, you must also understand the relationship between credit scores and mortgage approval. Lenders use your credit score as a risk-analysis tool. It will determine whether or not you qualify for financing, and also what kind of interest rate you can get on the loan. So this three-digit number is critical when buying a home.

You need to establish a monthly housing budget that includes your estimated mortgage payments, while allowing for savings contributions and quality-of-life expenditures. This should be done before you start talking to lenders. Many first-time home buyers skip this step entirely. And that’s a big mistake. Without a budget, you could end up taking on a mortgage loan that’s too big for you.

Learn more here.

When establishing your budget, be sure to include your estimated utility costs, homeowners insurance, HOA fees, and property taxes. First-time home buyers often overlook these expenses, because they are more accustomed to renting than owning a home. Home ownership comes with some extra expenses, and you need to incorporate them into your budgeting process.

Start studying your mortgage options.

As a first-time home buyer in 2012, you will have fewer options to choose from. That’s because a lot of mortgage products disappeared in the wake of the housing crisis. In one sense, this is a good thing. It means you have less homework to do, as far as researching the different types of mortgage loans. You should study the differences between adjustable and fixed-rate mortgages, and conventional versus FHA loans.

Get started here.

Think about your long-term plans. How long do you think you will live in the house, realistically? This will help you choose the right type of mortgage loan for your particular situation. For example, an adjustable-rate mortgage (ARM) loan is generally not a good idea for a long-term stay.
Make a list of your housing needs. This is a critical item for the first-time home buyer. Add this list to your housing file, which should include the other paperwork we’ve discussed in this article. You can also give a copy of this list to your real estate agent when the time comes. Your housing needs should include your desired location, the size of the house, the types of features you need, etc.
Consider making an appointment with a HUD-approved housing counselor. First-time home buyers in 2012 can use these services for little or no cost. You can find an approved counselor in your area by using the HUD website. You should tailor your search to find counselors that offer “pre-purchase home buyer education workshops.” Just by spending about three minutes on the HUD website, I was able to find six counselors that offer these workshops within driving distance.
Download a free copy of our 2012 Home Buyer’s Guide. This e-book contains more than 180 pages of useful information. You can save it to your computer and refer to it as needed during the process. It’s an essential tool for first-time home buyers and mortgage shoppers.
Start gathering your financial documents. You will need these documents during the second stage of the home-buying process, which is explained below. When you submit a mortgage application, you will be asked to provide a variety of financial documents as well. Here is a list of paperwork you should be rounding up.

SOURCE:

Read more: http://www.homebuyinginstitute.com/mortgage/first-time-buyers-167/#ixzz1tekhIBWT

FOR A FAST PRE-APPROVAL:
http://pmcmortgageloans.com/mortgage_application.php

First, complete a loan application on our website
-Go to http://www.platinummortgagecompany.com
-Click on Apply Now at the top
-Scroll to the middle of the page and Click on 3. Full Application

Advertisements
No comments yet

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: