Tips for First Time Home BuyersReal Estate | November 21, 2011 at 6:55 am
The task of buying a home is extremely challenging for the first time home buyers. The process involves several steps to be addressed and accomplished and a number of approvals to be obtained. However, when you finally manage to buy a home, the experience is similarly satisfying. A property owner can position him in greater opportunities. For making the purchasing process smoother and simpler, a first time home buyer must organize and prepare himself for the encountering problems that can occur during such procedures. Below, we have offered some useful tips for people purchasing a home or property for the first time:
- Before initiating the actual process of buying a new home, you must keep all your documents organized and check your credit score. Although the credit score of a home buyer is not the only factor required for obtaining home loan, it is definitely among the most important factors. Go through your credit report carefully, and understand the credit-standing you are possessing currently. Even if you find that you have an impressive credit report, you must analyze it properly before going to buy a home. Besides checking the activities and credit score, the lenders also check the ratio between the home buyer’s income and debt taken by him. For obtaining the desired amount as loan, it is extremely important that this ratio depicts that you have the financial strength required to pay for all expenditures related to the home (this include interest, principal and taxes). Majority of the lenders offer loan only to people having income: debt ratio within 28-30% of their overall income. A person having a ratio higher than that or anyone who needs to improve their credit history must do the necessary adjustments before beginning the home buying procedure.
- The next most important step while preparing for buying a home is completing all the necessary paperwork flawlessly. Arrange the annual tax returns, the bank statements, the pay stubs and the W-2s. Lenders might also ask for some additional information when you submit your loan application. Keeping the basic documents ready will ensure that you are on right track.
- Based on the type of loan you are applying for, the rate of mortgage interest will vary. To make things easier, there are several types of mortgage calculators available online to assist you in figuring out your mortgage and interest rates. Other than that, these interest rates keep on changing at regular intervals. Thus, while making the purchase, a home buyer must consider these variables. If you find that the interest rate is currently going higher than the average rate, you can decide to delay the purchase by some time or can also opt for another lender. Choosing the right lender is important to ensure that you are getting a profitable deal. You can also seek guidance from your real estate agent while searching for a lender.
- The process of purchasing a home should always be time taking and gradual. Never try to rush the purchase. Ask yourself about the kind of home that fits your requirements the best. Inform your real estate agent about your preferences. Based on that, the agent will shortlist homes for you, from which you can choose the one for buying.