Buying a home for the first time is one of the most fulfilling moments a family will experience. However, it will likely be one of the most stressful processes the family will face. The good news is there are a number of things you can do to make the process less nerve-wracking for you and your family while searching for a home mortgage.
1. Save for the Occassion
The traditional downpayment for homes amounts to 20 percent of the total purchase price. However, there are many downpayment options for homebuyers today and first-time homebuyers can plunk down as little as three percent toward the price of a home. The amount of your downpayment will affect the amount of your monthly note, your need to pay mortgage insurance, and the interest you will pay over the lifetime of your loan. Consider your options carefully and be sure to have the money you will need for a downpayment saved before moving forward with a purchase. The Tembo Financial website is a useful source of information and resources.
2. Research Assistance Programs
The federal government provides home buying assistance to first-time purchasers through government entities like Freddie Mac, Fannie Mae, the Federal Housing Agency, and the Veterans Administration. Most states offer support like downpayment assistance, help with closing costs, discounted rates of interest, and other things that can ease the homebuying process. Many local municipalities also provide assistance to first-time home buyers.
3. Check and Protect Your Credit
Your credit history will be a major determinant in whether or not a lender will loan you the money to purchase a home. Your credit will also influence the loan terms and interest rates offered to you. Check your credit for any errors before you begin the homebuying process. If the opportunity exists to improve your credit score in a reasonable amount of time, you should do so. Once you have applied for a home loan, refrain from opening any auto or credit loans that may lower your credit score.
4. Compare Rates
Many anxious first-time homebuyers make the mistake of either applying to only one home lender or accepting the first offer they receive without comparing it to others. This is a sure-fire way to pay more for your mortgage loan than may be necessary. Reports indicate that first-time homebuyers who compare quotes from three or more lenders will save themselves a considerable amount of money over the first five years of their home loan.
There are not many more satisfying experiences for a family than signing their names on the mortgage deed to their first home. However, the process of finding and purchasing a home has caused more than just a few first-time homebuyers to feel as if they would wilt under the pressure of the stress that is involved. The four tips above will smooth the process for first-time homebuyers and allow them to completely enjoy one of the best moments in their lives.