Around 35% of people looking for homes fall into the first-time category. The pursuit of a new home foments both excitement and stress, but for good reason. Obviously, you have never committed to such a large financial investment in your life. Though you may not be a real estate expert, you can take the critical steps required to choose a home that’s perfect for you and priced appropriately.
Check Your Credit
Before applying for a mortgage, check your credit score. It is used to determine the conditions and rates eventually attached to your mortgage loan. A high score indicates that you pay all your bills on time and are essentially debt free. This is important to lenders because it allows them to assess your financial situation and determine whether or not you pose a risk in your ability to make timely mortgage payments.
Anything above 700 is considered excellent, allowing you to receive a lower interest rate on your mortgage. If your credit score is not high, there are proactive steps you can engage before you start the home-buying process. Begin with paying your bills on time, leaving good debt on your report, and eliminating large credit card balances. The more judicious you are with your spending, the faster you can restore a credit score to good standing.
Pre-Quality for a Mortgage
You can see how much you can afford when it comes to Lake Minnetonka real estate before you even step out your door. Just become pre-qualified online. There are a myriad of real estate mortgage calculators online that assess your fixed debt-to-income ratio, which also factors in your down payment. You end up with an accurate idea of how much your monthly payments will be and the ability to therefore make a smart financial decision for you and your family when it is time to make the purchase.
Becoming pre-qualified also strengthens your negotiating power because it gives the seller confidence that no financial glitches will be involved. Therefore, when you make an offer, you probably will jump to the head of the line and real estate agents may even give you special treatment. This improves your odds of finding the right home relatively quickly.
Keep Your Documents Organized
When applying for a mortgage, you must present documentation regarding your income and taxes. You can show proof of income through pay stubs or balance sheets online. Keep track of these documents and organize them so that they are easier to access when it comes time to present them.
First-time home buyers must hurdle a lot of obstacles, but you can soar past them by being prepared and conducting extensive research. It all leads to speeding up the process and knowing that you invested in the right property.
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