Advice for First-Time Homebuyers

Buying a house is a major life milestone and may seem overwhelming for first-time buyers. Before you decide to commit to anything, it is important to do your research to ensure a smooth and successful process. Here are five critical steps to follow as you enter into this exciting phase! 

Determine how much down payment you can afford

First, figure out how much you can safely spend on a house before even looking at the market. Using a down payment calculator can help you figure out a price range based on your income, debt, credit score, down payment, and the area you’d like to live.

Keep an open mind about all available loan and mortgage options

When looking mortgage, there are several options available with varying down payments and eligibility requirements depending on the type of house you are looking for. These include conventional and FHA loans. 

Conventional loans are best suited for those with a credit score above 620 who are looking for a single family home. FHA loans are a better option if you are looking for a 2-4 unit property, or if your credit score is below 620. Both of these options only require a 3-3.5% down payment. 

Check and strengthen your credit score

After you have figured out how much you want to spend on a house, it is important to be conscientious of your credit score . Your credit score can have a major impact on your eligibility for a loan as well as its affect on your mortgage terms and interest rates. Research ways to improve your credit score, such as disputing errors and paying outstanding debts.  

Collect several mortgage rate quotes

Before settling with one lender, be sure to do some shopping around so you can compare the terms, rates, and fees. It is important to explore all of your options and go with the best lender that can fulfill your needs and keep you within your budget. 

Find the right real estate agent 

After you have researched the area and decided on where you want to live, you want to find the right real estate agent to guide you through the negotiation and closing process. A good real estate agent will scour the market to find you the perfect home for your needs. Be sure to interview a few agent and ask about their experience helping first-time home buyers.

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