Buying a house may have a lengthy legal process, but it doesn’t have to be as hard and as expensive as the media portrays it. With a little research, by working with a good mortgage broker, exploring the different types of purchase loans available and finding the right mortgage lender, you can easily achieve your dream home ownership.
For first-time homebuyers, here’s what you can do to help make your home-buying process more manageable.
Tip #1 Check your Credit Report And Improve Your Credit Score
A good FICO score and credit report are essential because the better your score is, the better the interest rates you can get. Every Mortgage Loans El Paso has a FICO score requirement. You need at least 580 to qualify for a mortgage so start early in improving your credits.
Tip #2 Aim For 36% DTI Ratio
Your Debt-To-Income Ratio is the total number of debt you have versus all of your monthly income. Before even applying for a mortgage loan, make sure to keep your DTI ratio at 36%.
Tip #3 Save Up For The Down Payment
Only a few people can qualify for home loans that don’t require a down payment. Make sure to save enough cash for the DP. Remember, the more significant down payment you can afford, the better as this can keep you from having to pay Private Mortgage Insurance.
Good Read: How to Save for a Down Payment on a House
Tip #4 Create A Realistic Budget
Some mortgage programs require 20% to as little as 3.5% down payment. Make sure that you don’t spend more than 30% of your income on mortgage alone. Remember, your monthly mortgage and down payments are not the only expenses you need to worry about.
Tip #5 Work With A Mortgage Broker
Such professionals have what it takes to help you save thousands of cash when buying a house and shopping for home loans. Their knowledge, skills, experience, and connections can help you get the best mortgage deals that work for your budget.
Tip #6 Shop For Mortgages
As a rule of thumb, never go house-shopping before getting a pre-qualification letter from your lender. It will serve as proof that you can afford to buy a home, and that you’re a serious homebuyer. Make sure not to settle on the first lender that approves you for a mortgage, as not all lenders are the same.
Tip #7 Shop For Houses Within Your Budget And Make An Offer
Another pro tip is to only look for houses well within your budget. Your lender may approve you for a higher mortgage, but it would be best not to exhaust your resources. Take notes while checking out houses well within the price range you can afford. Make notes, compare the pros and cons and make an offer.
#8 Don’t Skip A Home Inspection
As for the last tip, never skip a home inspection. This process will be the telltale sign whether or not the house you wish to buy is worth it. All repairs and maintenance needed to be done will reflect on the inspection result. If, after the home inspection, you find significant problems, you can choose to go with the purchase or find another home.
A home purchase is a significant investment. Make it a lot less stressful and worth it by keeping these eight tips in mind when buying a house with a mortgage.