The First-Time Homebuyer’s Guide

The time has come for you to purchase your first home. Years of saving and living frugally have led you to this day. Your independence has reached new heights and you are now at the pinnacle of your ambitious life. But, before you jump ahead of yourself, make sure you go down the checklist that every first-time homebuyer should go over before the official commitment is made.

Down Payment

A sufficient down payment has now become a requirement for many lenders. Since the economic crisis of 2008, lenders have tightened their grip on forcing buyers to have a down payment before providing them with a loan. This is primarily to reduce the risk of borrowers defaulting on their loans. How much money that your down payment is, is up to you. The higher that you make your down payment, the less of a loan that you have to take out – and pay off in the end.

Maintain a Solid Credit Score

Your credit score will dictate your mortgage interest rate. This is important for several reasons. One, you’ll want the lowest rate possible because a high interest rate can almost add up to the total amount of the loan. Two, you’ll receive better offers from several different mortgage lenders, should you decide to compare rates. Lastly, you’ll save money in the long run – especially if you’re opting to go for a 30-year term rather than a 15-year loan.

Documentation

Having the appropriate documentation ready will speed up the loan process a lot quicker. Speak with your lender about them giving you a checklist in regards to what you need to provide to seek approval. It only takes one missed document to delay the preliminary approval process. Make sure that you carefully store your income statements as well as any other necessary documentation in order to proceed with the home buying process. In the more competitive markets, it’s important to receive a pre-approval from the lender unless you want to be denied of even making an offer. Most sellers or realtors in the “hotter” markets won’t even consider looking at your offer without a pre-approval. This is one of the main things that you should remember before eye-balling your potential homes.

Summing it up

Before you begin envisioning yourself in your dream home, you have to make sure that everything is in order first to make that dream a reality. By preparing wisely and keeping your documents in good order, you might just end up buying a house a lot quicker than you expected.
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Realty ONE Group, led by CEO Kuba Jewgieniew, is a dynamic lifestyle real estate brand that values finding ways to enhance your overall experience and boost your success.