When you are ready to purchase a home, unless you have hundreds of thousands of dollars of cash in the bank, you'll need a mortgage to help finance your new investment. The home loan process can be confusing and new to first-time home buyers. Here are seven essential tips to help you navigate the home loan process, save money and find the perfect financing solution so you can buy your dream property.
The first thing you can do to get a mortgage happens years before you start looking for potential properties. Most homebuyers begin putting money aside for their home's down payment so they can afford this big investment. The standard down payment amount used to be at least 20%. If you want to buy a home someday in the future, start saving up early so you have more purchasing power and can afford the right property to meet your needs. The larger your down payment is, the better you'll look to lenders.
The next step in the mortgage process is to learn about the different types of loans available for home buyers. First-time home buyers have to research each type of loan they may qualify for. Buyers can choose a conventional loan or a government-backed loan. Government loans may be easier to qualify for.
Loans that are backed by the government may also be part of a special incentive program for certain types of buyers. If you have military experience, you may qualify for a VA loan, which doesn't require a down payment. Homes that are located in rural areas may be purchased through a USDA loan, which typically has lower costs than traditional funding. FHA and HUD also offer special types of loans that have lower down payment and credit requirements.
To qualify for the best interest rates with the top lenders, you'll also need to have good credit. Before applying for a mortgage, make sure you have an understanding of your credit. Monitor your credit periodically and check your score to make sure there aren't any dings on your credit history.
A mortgage also comes with fees and extra expenses. When you find a home to purchase, during the settlement process, you may have to pay upfront for the lender's fees. These fees may include loan administration costs, application fees, loan origination fees, appraisals and more. In a seller's market, the buyer is most likely responsible for these costs.
During the application process, your lender will ask you to provide documentation. Some of the common forms a lender will require you to submit for a home loan include income statements, pay stubs, tax returns, bank statements and debts.
Today's buyers have an advantage with more lending choices through online loan providers. Homebuyers can find competitive rates and lower fees by shopping around and considering which lender offers them the best deal. Once you find the right home, let Billy's selection of pros help you find the services you need for moving, renovations and more. With our pro services, you can customize your home to fit your lifestyle.
When inquiring about a loan on this site, this is not a loan application. This is not an offer to lend and we are not affiliated with your current mortgage servicer. Upon the completion of your inquiry, we will work hard to match you with a lender or lenders who may assist you with an official.
When applying for a loan, lenders will commonly require you to provide a valid social security number and submit to a credit check. Consumers who do not have the minimum acceptable credit required by the lender are unlikely to be approved. Minimum credit ratings may vary according to lender and loan product. Any loan product that a lender may offer you will carry fees or costs including closing costs, origination points, and/or refinancing fees. In many instances, fees or costs can amount to several thousand dollars and can be due upon the origination of the loan product. This site is in no way affiliated with any news source or government organization and is not a government agency. Not affiliated with HUD, FHA, VA, FNMA or GNMA. This site may contain affiliate and partner links. If you are contacted by an advertiser within our network, your quoted rate may be higher, depending on your property, credit score , debt to Income and other factors that will be disclosed by the provider’s representative. We do not guarantee the rates offered by our providers are the best in the market, please shop around for the best solution for your needs.