Buying your first home is exciting, but it can be a bit scary, too. There are many moving parts to think about, and you might feel intimidated when you start the first steps to buying a house. For most, buying a house includes getting a home loan. The process of getting your first mortgage is complex, but manageable. Remember: millions of people have done it before.
Here are a few of our favorite tips for first time homebuyers.
Buy a home you can afford
Being realistic and having a budget before you start looking at houses makes it more likely that you’ll find your dream home. Start by calculating how much house you can afford, determining a price range, and mapping out potential monthly payments. Consider getting prequalified with Mr. Cooper (all it takes is a no-commitment phone call to get expert guidance on how to buy your first home).
Factor in all of your expenses
Buying and owning a home comes with additional expenses, and if you are a first time homebuyer you might fail to consider some of them. Expect some expenses beyond just your monthly mortgage payment, because unlike renting, owning a home requires a lot more—property taxes, insurance, repairs to the house, monthly homeowners association fees, and more. While everyone’s situation is different, you might be able to research and estimate some of your own home expenses before you buy.
Focus on your credit
Your credit history is one of the most important factors that lenders consider during the mortgage application process. Credit scores range between 300 and 850, and a credit score of 700 or higher is generally considered good, while scores above 800 are considered excellent. Your credit is a decision-making tool for lenders, so the better your credit is, the more options you will likely have when it comes to getting a mortgage. Remember to keep in mind that your credit score is not the only factor for a mortgage approval, though; income, down payment, employment history, savings, and the amount of debt are also crucial factors that lenders will consider. Get a free credit report online before you apply for a mortgage to avoid any surprises.
Ask a pro for help
As you get ready to buy your first home, you should seek out experienced professionals. Before you start your house hunt, interview some of the most successful real estate professionals in your target neighborhood. A great real estate professional can guide you through the complex process of searching and buying a home.
The same goes for working with a mortgage professional. Just because a family friend is a mortgage broker doesn’t mean that it is in your best interest to work with that person. Seek out experienced lenders, and look for a true professional who can meet your needs, answer your questions, and educate you on your home loan options. Finding the right professionals to support you through the homebuying process is one step toward a successful mortgage journey.
Manage your mortgage
It’s a great feeling to be buying your first home and to qualify for a mortgage, but your work doesn’t end there—you’ll also have to make monthly payments on time. With every mortgage payment, you get one step closer to paying off your mortgage. A great way to make sure that you stay current on your mortgage payments is to take advantage of auto-pay options your lender might provide. Auto-pay enables you to schedule payments in advance, as well as set up automatic reminders to make sure that you never forget a monthly payment.