Buying your first home is a big decision that shouldn’t be taken lightly. You should expect to do plenty of research before you decide on a new house for you and your family, and know that the process could take three to six months depending on your housing market.
Buying a new house may be intimidating for those that don’t have much experience with it. Luckily, we’ve compiled a list of the top 4 essential tips for new homebuyers today to ensure you’re familiar with the process and know how to navigate the homebuying journey before you get to the closing table.
Review your credit
Before you call your lender up for a preapproval letter, you should know what your credit profile looks like and where you stand in the eyes of creditors.
Your credit score is arguably the most crucial part of your overall credit profile. The credit score is a numerical representation of your strength as a borrower and how likely it is for lenders to give you a loan.
Credit scores from 740 to 850 are considered excellent, and borrowers with scores in this range receive the best interest rates and financing terms. Those with credit below 620 may want to look into credit repair services before applying for a home to get better loan terms on their mortgage.
Don’t apply for any other new loans
Applying for a new credit card, auto loan, or personal loan can complicate the home buying process. Financing a large purchase decreases the amount the bank can lend you for the mortgage and reduces the likelihood of qualifying for a loan. You should avoid making other large purchases regardless of whether they involve applying for a loan or credit.
Get familiar with mortgage types
You should have an idea of the options that you have when looking to buy a house. Unless you’re paying cash for the home, you’ll need to qualify for a mortgage which allows you to pay back your home loan to the bank over time.
The main types of mortgages are:
- Conventional
- Federal Housing Administration (FHA)
- Veterans Affairs (VA)
- United States Department of Agriculture (USDA)
There are different reasons you would choose one loan type over another, so you’ll need to research the best loan type for your situation.
Getting your paperwork ready
The first step in the home buying process is applying for a preapproval letter from your mortgage lender. They’ll need several types of paperwork to get you pre-approved, so you should start by getting those documents together to speed up the process and prevent the lender from having to chase you down to get the needed paperwork.
When applying for a preapproval, you’ll need:
- W-2 or 1099s
- Recent pay stubs
- Two years of tax returns
- Bank statements
- Retirement account statements
Final Thoughts
Shopping for a new home should be exciting and stress-free. However, sometimes the process is complicated and hard to navigate.
Knowing these 4 essential tips for new homebuyers ensures you’re in the right mindset and have everything you need to apply for a mortgage and get approved for your new dream home.
Visit Kaya Homes for expert real estate services that combine experience and energy to create a fun home buying experience for everyone.
Find out why Kaya Homes is the leader in Long Island real estate and are your go-to realtor in the Lynbrook, Oceanside, Malverne, Hewlett, Valley Stream, East Rockaway, Woodmere, Cedarhurst, Hewlett Harbor, and Freeport area.
Tue, 09 Aug 2022 17:24:33 +0000
by Mottek Group