First-time home buyers approach lenders with excitement and joy at the prospect of becoming homeowners. However, the desire to buy is just the tip of the iceberg, and the buyer must advance their several hurdles before getting to the finish line. Reviewing opportunities for first-time homebuyers helps consumers make better choices and avoid unwanted circumstances.
Evaluating Your Credit
Evaluating the consumer’s credit gives them better insight into problem areas that could prevent them from getting approval for a mortgage. Negative credit listings and any overdue balances reflect poorly on the consumer and don’t make them creditworthy. When approaching a lender, it is best to get rid of any discrepancies on the credit histories and pay off smaller debts to increase the credit score. Even if this means getting settlement offers from collection agencies, it will at least limit the negative listings and look like the consumer is taking responsibility for their finances.
Research First-Time Buyers Programs
Researching first-time buyers programs helps the consumer find programs that eliminate the down payment and help them qualify for a newer home. The programs require the consumer to have a higher than average credit score to eliminate the down payment. Understanding how the programs work helps the consumer prepare for the road ahead and determine if they qualify. If they don’t, the buyer may have to pay up to 10% down for the property.
Establish a Steady Work History
Establishing a steady work history helps the borrower impress the lender and show that they are dedicated to their job. Lenders want to give mortgage home loans to borrowers with a stable work history. This indicates that the buyer has the money coming in to pay their monthly mortgage payments and insurance requirements. Typically, the lender wants the borrower to work at least two years for the same employer to get approval for the mortgage. All lenders verify the borrower’s employment and all information provided on the application. Any fraudulent information leads to a denial of credit.
Get a Preapproval for a Mortgage
Getting a preapproval for a mortgage simplifies the process. Real estate agents can help buyers more effectively if the buyer has an existing budget. This helps the agents find homes that are affordable for the buyer, and the agents know that the buyer has access to financing. Most agents won’t work with a buyer without the approval.
Weigh Your Options
Weighing their options helps the borrower determine what is more affordable for them. For example, once they have a clear budget, the buyer knows if they should buy an existing property or choose a new construction. Renovating an existing property might be a more affordable choice for some buyers.
First-time home buyers might have the opportunity to avoid a down payment and buy a home quickly. Their credit score, income, and employment determine if the borrower qualifies for a mortgage home loan. Getting a preapproval makes it easier to work with a realtor, too. Homebuyers who need help can get assistance at NRIA right now.