Making the decision to buy a first home is an exciting time for most individuals, couples, and families. While this may not be your dream home, it is a step in the direction of moving from renting to owning the home you have always wanted.
Avoid Emotions
Many first-time home buyers get caught up in the emotions of buying a home. They fail to do their homework and make sure they are getting the best price and the best mortgage loan for their financial reality.
One of the first steps that any buyer needs to do is a mortgage comparison. First time buyers may not be aware of the costs of home ownership, which is more than just a monthly mortgage payment. Using online calculators can help to see how a mortgage will fit in the budget and what is a realistic amount to borrow.
Preapproval
Going through preapproval from a qualified lender is a great way to determine the type of house you can afford. During the preapproval process, keep in mind that the amount of the preapproval is not the amount the lender is recommending, it is the maximum amount that the applicant qualifies for.
At this point, it is important to make a mortgage comparison. First-time buyers should review rates, consider fees and costs and then make a choice that is the best for their financial situation. By applying to more than one lender in a month there is limited impact on the credit score, but spreading it out over several months can result in a much lower score. This drop in your credit score will impact both the ability to qualify for a loan, particularly if the score is in the low 600s or below and also impacts the interest rates for the loan.
To complete a mortgage comparison, first time buyers can use the free calculators and tools offered at Guaranteed Rate. Guaranteed Rate can also help to find the perfect mortgage to suit your financial needs.
