If you’re in the market for your first home this process can be really stressful, especially if you’re en route to getting your first mortgage. However, the more knowledge you gain about mortgages will ease this process and equip you to making the right decisions when it comes to your new home. These tips will help you smoothly navigate the process and save money!
Know how your credit score affects your mortgage
Your credit score can play a big role in how much home you can afford and how much interest you will end up paying. You can expect a lower credit score will increase the interest you pay. Keep a sharp-eye on your credit report and score if buying a home is in your near future.
Save up for your down payment
Most lenders require a 20% down payment, but now some lenders are permitting down payments for as little as 3%. Even though a 3% down payment sounds nice, this can still be a pretty hefty expense. Thus, the reason you should start saving for a down payment as soon as possible. Tips for saving for this down payment include setting aside work bonuses and tax refunds, or setting up an automatic savings plan that can be tracked using an app.
Get your documentation in order
When you apply for a mortgage, you must document your employment situation, income, identity, and much more. It would be a great idea to start assembling the necessary documentation before you apply. This includes locating things such as your driver’s license, Social Security Card, most recent tax returns, brokerage and bank statements, pay stubs, W-2s, contact number for your employer’s HR department, etc. Being proactive about this process will make your home loan flow much smoother.
Shop around for a low rate
A common mistake made by first time buyers is accepting the first mortgage program that is offered. A small difference in rate could save you thousands of dollars over the course of a 30-year mortgage. Don’t be too quick to pick your lender. Explore the best option for you!
Fixed or adjustable rate?
Most homebuyers are better off choosing a fixed-rate loan. However, if you don’t plan on being in the home for more than a few years, an adjustable-rate mortgage may be the best option for you. This could save you thousands of dollars in interest. Know and decide which option would be your best choice.
Visit our first-time home buying web page to learn more and view our rates.