Are you thinking about buying your first home in the New Year? Do you know what you need to do before you start the home buying process? If not, check out these necessary steps to make sure you’re ready and prepared to take the next steps into homeownership.
Improve Your Credit Score
If your credit score is low and you want to purchase a home, try and improve your credit score before starting the homeownership process. Also, with a higher and improved credit score, your mortgage loan has the potential to be approved quicker and you’ll possibly have access to better interest rates. To use a FHA Loan from Union Home Mortgage, contact a loan officer to discuss your options.
Find How Much You Can Afford
Meet with a loan officer to see if you can pre-qualify for a loan. This process is done over the phone or in person. You provide information regarding your income, assets and liabilities to roughly see how much you can borrow. Being pre-qualified gives a good idea of what you are able to borrow.
Save enough for Your Down Payment and Closing Costs
The more you apply towards your down payment, the less you’ll have to borrow, making your minimum monthly payments lower. If you have a smaller down payment of 5% or lower, there is a possibility to not have as many loan options. In addition, most lenders prefer at least a 20% down payment but some mortgage loans allow a 3% down payment.
After the down payments there are the closing costs which are fees at the closing of your home when the property’s title is transferred to the home buyer. The closing costs are usually priced between 2% and 5% percent of the price of the home.
Find a Realtor You Like
If this is your first time buying a home, working with a realtor you like and trust is essential because you will spend a lot of time with your realtor looking at potential homes. Besides liking and trusting your realtor, you want to find one who has familiarity with contractors and inspectors, knows the neighborhood you want to live in and understands the housing market. For more ways to find a realtor you’ll love, check out this blog.
Finally, If you are ready to start the homeownership process, contact a Union Home Mortgage loan officer in your area today!