A Guide for First Time Home Buyer
It’s an American Dream for us to have our own houses. But, purchasing your first home can be a big step. There will be a lot of things you have to do to get yourself well prepared for one of the most exciting experiences in your life. Besides, you need to keep yourself updated with the latest information to make sure the thrill of having a new home will not turn sour. As a first time home buyer, you might not know much about mortgage loans and related requirements. Hopefully, this guide can be useful for you.
Understand the benefits of being a first time home buyer.
Never thought buying your first home would bring you benefits? Actually, there are several advantages of being a first-time home buyer. In some states, you might have access to special mortgage loan programs which come with better mortgage rates or feature faster approval and a limit on fees. More amazingly, lenders tend to offer first time home buyers reduced down payment, making it easier for moderate or low-income families to purchase their dream homes.
Plus, for first-time homebuyers with low income, state or local government might offer financial aid to help them cover down payment or closing costs. You may also save a lot on mortgage interest as the federal government allows first time home buyers to deduct their interest paid throughout the year as long as they file an itemised tax return.
Figure out what kind of home you want.
Whenever you purchase a home, take your and your family’s needs into account. There are always lots of houses for you to choose from, select carefully based on your likes and dislikes. Ask yourself which you love the most: a single-family home, a stylish condo or a big house with swimming pool in the backyard? Every coin has two sides, and there is no exception for houses. Location and condition of the house, neighbourhood environment and transportation will all play a significant role in your decision making.
Check your credit score.
You know, good credit history is very important when it come to purchasing your first home. Generally, lenders will require you to provide your credit record along with your application form. And if you by any chance have a bad credit history, your application might never get approved. Or even if you obtain the loan, you’re going to pay higher interest rate which will surely cost a large amount of money.
Therefore, be sure to check your credit record before you apply for mortgage loan. Once you find your score is below 800, it might be a better choice for you to put off the home purchasing plan and try to rebuild your credit. Just pay off your credit card debt or modify the erroneous information if there are any, and you might increase your credit score quickly.
Know the amount of mortgage you are eligible for.
Well, the mount of money you are able to borrow might be quite different depending on the loan types you choose. Besides, loan size varies from one lender to another. Whether or not you have a stable job, regular income, other debts and good credit history will also affect the loan amount. If you have no idea how much you can borrow, visit a local bank or mortgage loan broker. The will calculate the loan amount you qualify for as well as the down payment you will need.