Tips for Qualifying for a Loan as a First Time Home Buyer

Purchasing your first home is both exciting and nerve-wracking. Along with all of the fun of having a place to truly call your own, you are also going to be dealing with a mountain of paperwork and legalities to maneuver. This includes securing that important mortgage.

Here are four proven tips to help you to qualify for a loan as a first-time home buyer.

Understand Your Credit Score

Lenders will pull your full credit report when deciding if to approve your mortgage request.

Before this part of the process is triggered, it is important that you take the time to understand your credit score.

There may be mistakes and other issues that you will want to clean up before the lenders begin looking into your financial health.

You will qualify for a better rate and a larger loan with a better credit score. If you need to hold off on buying a home in order to improve your credit score, then it might be wise to do so.

It will end up saving you money in the long run. 

Set a Budget and Stick to It

It is vital that you set a budget before you even step into that first open house. This means that you also need to have a handle on what homes are going for in your area.

For example, you need to understand if homes are routinely going over the asking price. If so, you will want to factor in some wiggle room to your budget, knowing that you may need to make an offer higher than the home’s original listing price.

Make sure you look at home listings in your area in order to set a realistic budget for yourself. 

Obtain a Pre-Approval

Savvy home buyers understand that a mortgage pre-approval is gold when it comes to putting yourself in the best position to secure a home.

A credit union is often your best bet when it comes to obtaining this pre-approval letter, demonstrating that you are a responsible buyer who is in the financial position to afford a home as soon as the offer is placed.

Have a close working relationship with your mortgage lender throughout the home buying process to have better chances of getting your offer accepted. 

Investigate First-time Homebuyer Programs

You would be wise to investigate any potential first-time home buyer programs in your city or state.

These programs can lower the overall cost of homeownership, helping you to potentially afford more than you originally considered.

For example, you may find a program that helps cover a portion of the closing costs.

Your local housing department or a real estate agent may be able to point you in the right direction to understand what programs may be useful to you.

You will increase the odds that you end up in the house of your dreams if you follow these steps as a first-time home buyer. It will make getting a mortgage much easier. 

Tags: buy a home, Credit score, Credit union, First-Time Home Buyer, Set a Budget

Category: Housing