When you decide to buy a home, there are several questions you want to ask yourself. Here are some tips to help you through the process.
Make sure you have a budget and know what you can afford in a monthly payment. Make sure you account for all your monthly expenses including utilities, food, clothing, etc. You want to enjoy your home and not be "house poor"!! If you are not paying rent or paying very little, start putting money into a savings account equal to what you think your house payment might be. That gives you an idea of what you can spend, plus it helps build a savings account for your new house!
Check your credit score and know if there are any mistakes on your credit report. This gives you time to fix your credit report and improve your credit score. For the best rates on a conventional loan, you want a score of 740 or higher. You need at least a 620 score for most loans right now.
Decide how long you will be in the home, most buyers these days are going with 30 yr fixed rate loans. There are adjustable rate loans, but usually the interest rates aren't much lower than a 30 yr fixed rate these days. It's nice to know that your rate won't change in the next few years.
Collect the documents that your lender will need for your preapproval. You will need a recent paystub, 2 yrs of w-2's and a recent bank statement. If you are receive child support, you will need a copy of your court decree. If you collect social security income, you will need your award letter from social security. If you are self employed, you will need 2 yrs of complete tax returns. Your lender will let you know if they need any other documentation.
You want a preapproval, not a prequalification. A prequalification just means that the loan officer looked at your income and debt and calculated what you would qualify for. They may have pulled a credit report, but not always. A preapproval means you have been through an underwriting system, your credit report has been pulled and your lender has looked at your income documentation.
Have fun looking for homes! There are lots of different homes available and many different areas. What one person wants, someone else may not! Usually you know when you walk into a home if it is something that you like!!
Leslie Vanderwerf, Advisors Mortgage - lvanderwerf@advisorsmtg.com – Website
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Great tips for home buyers..When buying a home,there are factors that one should consider especially the first time home buyers..Do some research and of course make an actual site inspection.