Did you know that by 2015 7.6 million Millennials owned a home?
Young buyers are making a difference in the real estate market in the last few years.
If you’re a first-time home buyer and you want to avoid novice mistakes, you came to the right place.
Read on to learn more about the tips to get mortgage ready.
1. Starting the Home Search Before Learning About the Mortgage Process
Buying your first home is one of the most exciting moments in your life, which is why you might start wanting to look at homes right away.
However, to avoid making a mistake, it’s important you don’t start attending open houses before you learn about the mortgage process. Start by familiarizing yourself with current rates and an overview of how the process works. You need to know how much you can afford before you fall in love with a house out of your reach.
2. Not Getting Pre-Approved
Many first-time buyers neglect to get pre-approved for a mortgage before they meet with a realtor. This is a mistake that could end up costing you the house.
Getting pre-approved will let you know where your credit score stands, your rate, and the loan amount you qualify for. Not to mention, if you put down an offer while pre-approved sellers will take you a lot more seriously.
Having a letter of pre-approval makes you a better candidate.
3. Avoiding Credit Issues
If you have large debts or a less than ideal credit score, you need to deal with the issue before you call your realtor.
The last thing you need as a first-time buyer is to put an offer on a house and discover your credit score is low. If you’re serious about the home search, you have to deal with cleaning up your credit score first.
The first step is to get a free copy of your credit score and see which areas need improvement. Paying down credit card debt and paying your bills on time can make a big difference to your chances of getting a mortgage.
4. Not Shopping Around for a Loan
Shopping for a home is not too different than shopping for a mortgage — you don’t settle for the first one you see.
Buying your first home is one of the most important purchases in your life, which is why it’s important you get the best rate. Don’t take the first loan offer you receive; take your time comparing rates to make sure you get the best deal.
5. Buying a House Outside Their Budget
The house of your dream can quickly turn into a nightmare if you cannot afford it. A big mistake that homebuyers can make is looking at homes they cannot afford.
To avoid making this mistake, talk to your real estate agent about only showing you homes in your budget. Staying within your means when looking for a home will guarantee financial success.
How First-Time Homebuyers Can Get Mortgage Ready
Now that you know how to get mortgage ready, it’s time you begin the search. Start by only looking at homes within your budget, get pre-approval, and shop around for more than one loan option.
If you enjoyed these tips and would like to learn more about buying a house, check out this section of our site.
