So you want to buy your first home. Congratulations! Now, where to start? Melinda Golde from our Mortgage Banking Group was able to share some helpful tips for those looking to buy their first home.
Check Your Credit
Your credit score is one of the most important factors when purchasing a new home. It can affect the credit decision on the loan as well as the actual cost of the loan – the lower your credit score, the higher your interest rate may be. Your homeowner’s insurance premium can also be affected by your credit score Before applying, review your credit by accessing your information at annualcreditreport.com. Make sure there are no mistakes, unpaid or past-due accounts or collection accounts. If you have items on your credit report that need to be repaired, or you just have limited credit experience, you will need some time to work through and correct those issues – you should allow at least six months before shopping for a new home.
Organize Your Documents
As part of the home-buying process, your mortgage lender will require you to document your income and your assets. Make sure you have your two most recent pay stubs, the previous two years’ W-2s and tax returns, as well as your two most recent bank statements (all pages). Buying a home can be a long process, but having your documents organized can help.
Determine How Much Down Payment You Will Have
There are many loan programs available that do not require a down payment of 20% of the purchase price. Some programs require as little as 3% down with 0% down options available for rural properties or active and retired military personnel. You may even be eligible for down payment assistance. (A down payment less than 20% may require mortgage insurance that could affect the payment).
Review Your Cash Flow
Determine where your money is going each month and then compare that to how much you make (gross monthly pay). You may even go as far as tracking your spending for a couple of months. What kind of house payment are you comfortable with based on your current income and liabilities?
Get Expert Advice
A pre-approval is a valuable tool to have as you begin your search for your new home. At Stock Yards, there is no charge or upfront fee for this service. After you are pre-approved, work with a real estate agent that has knowledge of the area in which you’d like to purchase. Give the agent an idea of the type of home you are looking for and the amenities that are important to you, and they will do the leg-work.
Make sure to check out our website for more information regarding mortgage services. Just purchased your first place? What are some tips that we left off?