5 Important Things to Keep in Mind for First Time Buyer Mortgage
If you are considering purchasing a home for the first time, or simply want to know what it would take to get you there someday, there are standard guidelines that home loan qualification requires. It is important for a first time buyer mortgage to know certain things to have a smooth transition.
Keep in mind that each payday loan lender will weigh your qualifications differently and that even though you might feel attaining a loan is impossible it might not be. Take a look at some of the areas that home loan lenders will look at.
For most first time homebuyers, it can be helpful to make sure that your finances are in order a few years prior to purchasing property with any type of mortgage loan. This will not only ensure that your credit is clean, but that you have a solid down payment saved up to purchase your ideal first home.
5 Important things to keep in mind for first time buyer mortgage
- Debt-to-income Ratio
- Down Payment
- Credit History
- Right Mortgage brokers
A serious question that lenders have to consider is how much debt and payday loans you have versus the amount of income you are generating. This is called your debt-to-income ratio. They will take into account all of your fixed expenses and measure that number against how much income you generate in a month.
Less than 50% of your income should be going to your expenses for most lenders. Keep in mind that utilities, cable television and phone bills are among the few that are not included in a debt-to-income ratio.
Depending on the home loan lender, most like to see that you have a sufficient amount of cash reserves for a regular mortgage payment.
They also like to see that your down payment comes from a checking or savings account which means that cash is not loose. For this reason, it is highly recommended to use a bank account for housing money several months prior to actually purchasing your home.
A down payment is required to attain any type of home loan, although depending on the loan and the home that you are purchasing this amount may vary.
If you are going to be attaining an FHA loan, one that is great for first time buyers, the minimum down payment is 3.5% of the sale price of the home. For a traditional home loan, this amount usually increases between 5-10% of the sale price of a home.
Don’t forget that on top of the down payment you will need to have more money to pay for closing fees and other charges that accrue with a settlement.
Your credit score and history are of extreme importance to mortgage lenders. Not only can they determine the likelihood that you will pay them back based on your debt payment history, but they will take your credit score as an indication of responsibility.
Mortgage companies typically consider a great positive payment score to be above 740. For the most part, most lenders require a minimum score of at least 620 for a home loan.
Your credit history also tells the lender about your rental history and whether or not you have ever been late on your rent in recent years, which can certainly raise a red flag.
Right Mortgage brokers
Buying a house is something that most people hope to be able to do in their lifetime. A house is considered by some as part of the American dream. They want a space they can call their own, where they can live freely and decorate according to their specific tastes.
- Professional Help
- Relevant Contacts
- Easy to find a property
When buying a house, most people will need to find the financial means to do so; this is why they turn to a mortgage broker for help. A mortgage broker is a professional who helps others determine how much house they can afford. Mortgage brokers help people figure out the best possible mortgage for their financial needs. Working with a mortgage broker typically allows the potential homeowner to find the best possible way to help them afford the kind of house they want.
Many mortgage brokers work closely with both banks and clients. Mortgage brokers typically do not charge their clients for help. Instead, they usually work with banks and often remain on staff there to help customers. Many mortgage brokers provide their customers with many types of important services, including completion of paperwork that may otherwise be confusing and unclear. They know which banks offer the best rates for any given mortgage; this allows them to work with clients at their bank as well help clients locate a bank that might be better for their needs in other circumstances.
Easy to find a property
Finding the best possible mortgage is an important task. It is best to work with a mortgage broker who can help support their customers as they look to build a rich and rewarding future full of promise and hope. A good mortgage broker is one who will be on a client’s side at all times during the mortgage application process as well as when the mortgage is being considered for approval. Clients who work with a mortgage broker of this kind will have a partner that can walk them through the entire mortgage process.
The best kind of mortgage broker is a mortgage broker who really cares about their clients. Working with such a mortgage broker can enable anyone to stroll through the mortgage application process easily and without a problem of any kind.
Having a mortgage broker of this kind on your side can allow anyone to relax while they are applying for a mortgage because they know that have someone who is going to provide them with the help they need and make the process far less stressful.