Let’s discuss some important home loan information for first-time home buyers. When first time buyers delve into financing, they can bump into unexpected delays. That’s why the team at Springs Best Mortgage encourages new buyers to learn the ropes before shopping for homes or mortgages.
Remember, you want a manageable loan with monthly payments that fit your budget. Contact us to sit down and go over the basics. We adjust our guidance to fit your goals and circumstances. We can suggest reputable real estate agents and help with negotiations. Watch how Springs Best Mortgage goes all-in to make the home loan experience start a beautiful new cycle for you and your family.
The process begins with loan pre-approval. Zeroing-in on the best loan package will give you the best preparation. Springs Best Mortgage will discuss several loan options. Then it’s time to apply for pre-approval from your chosen lender. During the process, lenders will ask for details about your financial life. Lenders will need to see your personal information when you ask for pre-approval. They examine your income, assets, debts, liabilities, and credit score and history. Pre-approval puts you in charge of your time and money.
How Does Pre-Approval Help You?
Pre-approval is free and to your advantage. In fact, don’t even look at homes for sale until after you know how much the lender approves for your mortgage. Here are some advantages of pre-approval:
- You will know which price range of homes to include in your search. (Or you may decide to go for less expensive homes so you have more discretionary income for travel, private schools, furnishings and landscaping, etc.)
- Pre-approval convinces sellers of your earnest desire to buy a home. You might say it is a superior bargaining card in today’s competitive market.
- The pre-approval process may alert you to problems with your credit score, funds on hand, or documentation and give you time to fix these issues.
- Pre-approval gives you the ability to estimate money needed for down payment and closing costs.
Upfront Costs of Buying a Home
First-time buyers often do not understand transaction costs. At closing, about 3-5 percent of the mortgage value is charged for closing costs and lender fees. Regular closing expenses may be charged to cover loan fees, insurance, taxes, title charges, recording charges, and application fees. Occasionally, the seller or a family member may pitch in to cover these costs. However, your own savings helps keep your options open.
Keep in mind that your savings will improve your financial clout. A good down payment may not always be necessary but it sure helps save on interest costs over the life of the loan.
The Loan Process: What to Expect
Think about the home loan process as climbing a flight of stairs. We’ll show you how to take them lightly. Expect several steps like these:
- Initial Meeting
- Gather Documentation
- Get a Home Appraisal
- Conditional Approval
- Final Underwriting