Most financial analysts would agree that now is a great time to purchase a home. With mortgage rates at historical lows, first-time home buyers are faced with numerous opportunities to purchase the home of their dreams.
Now you’re ready to start the process! We’ve compiled a few smart strategies for you.
1. Create a budget: Develop a household budget and stick to it. You’ll need to factor in expenses such as your current mortgage payment, childcare costs, monthly household expenses (for example, utilities, food, etc.), annual and semi-annual payment obligations and other miscellaneous expenses. Once you’ve set your budget, you can begin the home buying process.
2. Make sure you have the right credit score: Many first time homebuyers chose an FHA loan because it requires the smallest down payment – only 3.5% of the sales price. FHA loans are available with a minimum credit score of 620. However, borrowers with a score of 640 or better will get a lower interest rate. Conventional loans require a credit of score of 640. The higher your score, the lower your rate will be. Scores of 760+ will get the best rates! For more information, read Pre-Qualification Process: How To Come Prepared To Meet Your Loan Officer.
3. Get pre-qualified: The prequalification process is an important step, whether you’re a first-time home buyer or not. Finding the right loan for you requires an accurate analysis of your individual financial situation. Talk with an experienced, licensed mortgage banker at Envoy Middle Georgia and let us assess your unique financial situation.
4. Understand loan costs: Discussing the various types of mortgages with an Envoy mortgage banker is an important step in understanding the costs of a home loan. Envoy Middle Georgia offers an array of loans, FHA, VA, USDA, and conventional loans. Each type of loan has different fees so understanding the costs is important.
5. Gather important documentation: As part of the loan process, your Envoy Middle Georgia mortgage banker will ask for numerous documents at the time you make a formal loan application. Different types of loans require different documentation but all loans require some type of legal identification, your last two pay stubs, most recent two years tax returns with W2s, and your two most recent bank statements. Your Envoy Middle Georgia mortgage banker will discuss other documents they will need after they have reviewed your unique situation. If you wish, you may provide these documents when you prequalify for a loan but they are not required at that time.
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