What To Know As A First Time Home Buyer
Posted on: 9 October 2019
Buying a home is a major decision. Not only will it impact your everyday life, it will also impact your financial life for years or even decades. Of course, when looking for your first home, it's important to find a property that meets your needs and that is in the right location. However, it's also important to consider the financing that you will use for your first home as well. Getting the right mortgage is very important. Here are three things that you should know as a first time home buyer.
Your Mortgage Options
The first thing that you should be aware of is that there are various types of mortgages to choose from. Looking into your options is a must and will ensure that you find the right home loan for your needs. There are various first time home buying services that can help you navigate financing your first home. In addition to conventional loans, you may want to consider FHA loans, USDA loans, VA loans, HomeReady HomePath mortgages, and more. By looking at your options you may find more favorable terms through one of these programs.
Your Finances Matter
Another thing that you need to be aware of as a first time home buyer is that your finances will play a key role in whether or not you qualify for a home loan. It's important to take a look at your credit score, debt-to-income ratio, and overall financial health before applying for a mortgage of any type. While you may be able to get an FHA mortgage with a credit score of 500, typically you will need a higher score for other types of loans. Your debt-to-income ratio will need to be under 41 percent for most loans. Taking stock of your financial situation before looking into loans is important.
Shopping Around Can Help
If you are having trouble deciding which type of mortgage will be best for your needs, shopping around can help. It's recommended that you look into at least three different lenders and also consider using a mortgage broker in order to find the right mortgage for your needs. As a first time home buyer, shopping around will help you find the best rates possible. Many lenders also have first time home buyer specialists that can help you get the right loan for your first home.
Buying your first home is a major decision. If you are a first time home buyer, there are a few things to know. First, knowing that there are different types of mortgages to choose from is important. Your finances will also play a big role in what type of loan will work best for you. If you aren't sure what type of financing to go with, shopping around with various lenders and even using a mortgage broker can help.
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