- Tip #1: Know your credit score. You should find out your credit score before walking into a mortgage lender’s office. The lender will run a credit check and you will find out your credit score during the process anyway, but if you already know it going in, you are at an advantage. Many credit reports contain mistakes, so if your score is lower than you expected, take a look at your credit report and find out why. Ordering a copy of your credit report from each of the three major bureaus is free at least once per year for all consumers. Take a close look at the reports and make sure all the information is accurate. If there are mistakes, write, call, and follow up to make sure they are corrected. This process can take some time, so start it early.
- Tip #2: Get financing before you start shopping. It’s tempting to go ahead and begin looking at houses, condos, or co-ops right away, but do yourself a favor and hold off until you’ve secured financing. This way, you know how much you’ll be able to borrow before you fall in love with a home that’s out of your price range. The financing isn’t the fun part of buying your first home, but it’s the necessary part you must do first. Figure out how much you can afford to put down, whether that’s as little as 5% or the more standard 20%. The type of loan you qualify for will depend on how much you can put down, your credit rating, and how much you can afford to pay per month. Once you’ve got your financing in place, let the search commence.
- Tip #3: Decide what kind of property is right for you. Do you want a home that will require some work? How important are schools, walkability, and distance from your workplace? Don’t fall in love with a home just because it has the built-in bookshelves and fireplace you’ve always dreamed of, if it doesn’t meet your other needs.
Following these tips will make the first-time home buying process easier, according to the experts at People’s Home Equity.
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