5 Key Tips For First-Time Homebuyers

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Christopher Garza

Christopher Garza

5 Key Tips For First-Time Homebuyers

Buying your first home is obviously one of the most important and intimidating purchases you will make in your lifetime. With so much on the table, mistakes seem inevitable right? This might be true, but you can definitely minimize that possibility by being proactive in certain key areas. Here are 5 Key Tips for First-Time Homebuyers to put into action before making that leap towards homeownership.

1. Hold Off On Making Any Big Purchases Until After You've Closed


One of the most common impulses first-time homebuyers have is the desire to outfit that soon to be dream home with new furniture. As beautiful as that Broyhill livingroom set would look in your new home, the best move you could make is to resist buying it or making any major purchases for that matter until after your loan is finalized. Avoid making substantial purchases with your credit card. Bear in mind that any significant credit card charges will raise your debt to income ratio, thus potentially effecting your interest rates and even worse having your home loan application completely denied. Do not apply for new credit cards. Do not co-sign for loans for family or friends. Don’t do anything that can sway your credit score in either direction. As insignificant as it may seem, even the slightest change in your credit score can completely jeopardize your ability to purchase that dream home.

 

2. Obsessively Evaluate And Track Your Credit

Unless you happen to have a heaping pile of cash lying around and plan on paying for your home in upfront cash, then chances are you will need a home loan to purchase that home of your dreams. But before you even consider applying for a Mortage loan, you will need to know exactly where your credit score is. Although your credit score isn’t the end all be all when determining whether or not you will qualify for a home loan, it is still a very vital and crucial factor. Your credit score can be the difference between getting that home of your dreams, settling for a home you would otherwise drive right passed or even worse, no home at all. Many Mortgage Lenders will offer FREE complimentary credit evaluations and can do what is called a soft pull on your credit which doesn’t affect your credit score in any way. What it does do though is give you and the lender an opportunity to evaluate your credit history, take a look at your scores, see if there is room for improvement and help you put a plan in place to increase your score.

3. Before Shopping For A Home, Shop For A Mortgage Lender

Most people’s first impulse after they’ve made the decision to buy a home is to immediately hop in the car and begin driving around looking at houses even before they’ve actually secured the funds for the home. Well if you sit and think about it, that is the equivilent of going to the grocery store on an empty stomach with an equally empty wallet. When you look at it from that perspective, it doesn’t make much sense does it? The very next thing most people do is seek the help of a realtor. Realtors are great! The truth is however, a lot of realtors, if not most of them prefer that their clients visit a Mortgage lender first for a pre-approval letter. The reason for that is if your application for a home loan happens to be denied, then all of the time and energy the realtor spent showing you houses was all for naught. In addition, as great and knowledgeable as realtors can be, there are parts of the buying process they might not be as familiar with as a lender. Seeking the expertise of a Mortgage Lender will also help you in taking a proactive approach to the entire home buying process. Lenders can tell which income and tax documentation you will be needing for approval.

4. Know Your Existing Debts And Financial Reality


Remember, first-time homebuyers don’t have to worry about the 20 percent down payment norm that seasoned home buyers do, but that does’nt mean you should come to the table with the bare minimum. The higher your down payment is the better your interest rates will be and the lower your monthly mortgage payment will be. However, having the ability to come up with a substancial down payment will boil down to your ability to get a grip on your existing debts and have a clear eye view on your present financial status. Being realistic about your current financial reality is arguably one of the smartest and most proactive things you can do before diving into the home buying process. Knowing your DTI or Debt To Income Ratio is paramount. If you have car notes, unpaid medical expenses, student loans, credit card debt, etc. , knowing where you stand will better allow you to put a plan in place to pay some of these items down. Be real about your spending habits. Always know what is going out and what is coming in. Even if you are quite the thrifty spender and have a good handle on those impulse buys that most people fall victim to, it is still a great idea to know how much money is left over at the end of every month, and having a budget in place will help you see that picture more clearly. It will also give you a better understanding of how much house you can realistically afford.

 

5. Get To Know The Neighborhood Very Well


Choosing the neighborhood you wish to live in is just as important as choosing the type of home you will actually be resting your head in at night. You have to look beyond the homes curb appeal and really get an understanding as to what is influencing the values in the neighborhood and why. Be sure to do your due diligence on the schools surrounding your prospective neighborhood. Whether you’re a parent or plan to be, the academic reputation of the educational institute near your potential home will not only have a major influence on the value of your home, but it should also have a major influence on whether or not the home is even a contender. What is the noise level like? How is the nightlife? What are the neighbors like? The crime rate, neighborhood amenities, the proximity to hospitals, shopping outlets, grocery stores etc are all additional factors to consider when shopping for a home. Before you commit to buying that house you fell in love with, make sure you love the neighborhood it is located in and all that it has to offer as well.

 

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About Me

I am a Loan Officer Assistant, Blogger and the Social Media Manager for the Willow Bend Mortgage Team Corpus Christi branch. I’m a proud family guy and blessed father of two beautiful girls ages 16 and 8. I have a genuine passion for the mortgage business and sincerely enjoy being in the position to assist families in Corpus Christi and throughout the Coastal Bend get to experience the amazing joy of home ownership.

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