If you are in the market to buy your first home, you are likely feeling very excited as you look around for the perfect home for sale in DeRidder. The experts at LA-based EXIT Real Estate Consultants say that first time buyers can benefit from making sure that they have all of their paperwork in place before they start looking. Here are some other tips for first time buyers that might make the entire process simpler.
Save for Your Down Payment Early
How much of a down payment you need will depend on several factors. For example, the selling price of the house will affect how much a lender expects you to contribute. However, the lender itself will also play a role. This is because some lenders will expect you to contribute up to 10%, but others will be willing to lend you up to 97% if you have an excellent credit score. Whatever the down payment requirement, it is still going to mean saving up a big chunk of money. If the homes you are looking at are priced around $350,000, you will need to save up a minimum of $10,500 as a down payment, so the sooner you start saving, the better.
Consider the Other Costs
There is more than just the down payment to consider when saving. You will also need to cover the closing costs, which are fees required when the mortgage is finalized. There will also be expenses that come with actually moving to the property, such as upgrades or any repair work that is required.
Make Sure Your Bank Statement is in Good Shape
Lenders will require bank statements during the underwriting process, and you may be asked to send in up to six months’ worth. Lenders want to see that you can manage your monthly payments and that you are not relying on your overdraft every month. At the end of the day, they want to make sure that you can afford the mortgage.
You will need to ensure that there are no bounced checks, or regular payments to an undisclosed individual or account. They will be making sure that any credit payments on your statements match those that have been disclosed by you.
Work on Your Credit Score
If you have a good credit score, you are likely to get the best deals in terms of mortgages. You will be eligible for loans with lower down payments and your interest rates will be lower. It makes sense then to improve your credit score before looking for a home for sale. Check your credit score with the three main credit bureaus to ensure that everything looks as it should. If there is anything on there that you don’t recognize, make sure you query it. Even something small could affect your chances of getting mortgage approval.
To improve your credit score, be sure to make payments on time and do not utilize too much of your available credit. If you have credit cards that you don’t use, don’t close the account as this will then lower your overall available credit. This could then harm your score.
Use a Real Estate Agent
When you have your paperwork in order and are ready to start looking for a home, be sure to get in touch with a reputable real estate agent. Agents can help you to find the perfect home, making the process both simpler and easier.
To conclude, buying your first home is an exciting time, but being prepared will make it go smoother. Make sure you have everything in place before you start looking to prevent any heartache down the line.