The initial step in buying your first home is determining whether or not you are financially qualified to purchase a home, and establish a comfortable price range that won’t bust the bank or cause problems with other demands on your budget. This step is called mortgage pre-approval. You also need to understand a few things about the process beyond that. Here are some helpful, practical ground rules when you take this initial step – for your first home mortgage:
5 Guidelines in Getting Pre-approved for First Home Mortgage
- Be Honest about Your Situation, Don’t Hide Things: When you meet with your mortgage lender, make sure that you provide them will all the correct documentation. Don’t withhold any information about your current expenses, debts, past judgments, liens, or credit issues. It’s better to be completely up front in the beginning, rather than to have something come up unexpectedly in the final hour that adversely affects your ability to buy a home.
- Don’t Buy Any Large Items on Credit: Be careful not to buy any big ticket items while you are in the process of buying a home, like a new car, a boat, or charging that long-awaited vacation to Vegas on your credit card. Large dollar amount purchases can have a negative impact on your debt-to-income ratio. Even purchases that have extended financing (no payments until next year) can hinder your ability to qualify for a home loan.
- Stay within Your Budget: For people getting their first home mortgage, It can be very tempting to wander outside of your established budget to buy a home that has more features or amenities than you can comfortably afford. Recognize, that statistically, most First Time Home Owners are only in their first home for 5 years or less. You can always make desired improvements to your new home over time, as your budget allows.
- Look at All Your Options: When shopping for your first home mortgage, take time to evaluate all the various types of home loans. A good mortgage company will be able to suggest a loan product that best suits your income, budget, and home buying goals.
- Don’t Go Changing Jobs or Banks: Mortgage loan underwriters are going to want to see long-term consistency and stability in your employment and banking practices. Don’t change jobs or banks while you are engaged in the home buying process.
By following these basic ground rules for your first home mortgage, you will successfully achieve your first time home buying dreams!
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