A Plan for First-Time Homebuyers: Go from Prepared to Purchase
If you’re a first-time homebuyer who has succeeded in saving enough for a down payment (remember, you don’t necessarily need 20%) on your very first home – congratulations! You’ve tackled one of the hardest parts of the homebuying journey, but you haven’t crossed the finish line to homeownership just yet. Here’s a plan to help get you to closing day:
Do you know your credit score? If not, then request a copy of your credit report from TransUnion, Equifax and Experian. Your credit score plays a huge part in your future financial picture. Start working to resolve any errors or outstanding debts before making an offer on a house. It’s important to determine your debt-to-income (DTI) ratio by reviewing assets and debts. The higher your DTI percentage, the riskier the investment is for lenders – which can lead to higher interest rates.
Prepare the Paperwork
Begin gathering all necessary documents. Those documents may include proof of assets, pay stubs, tax returns, bank statements, IDs, previous addresses and Social Security numbers. Study the documents to familiarize yourself with your financial situation, motivate your home search and keep your debt-to-income ratio low.
Get Pre-Qualified or Pre-Approved
Make an appointment with a loan originator to get pre-qualification or pre-approval. Check out our list of mortgage lenders, if you haven’t found one just yet. Keep in mind that many homeowners borrow less than the maximum to account for other expenses and opt in to lower monthly payments. Revisit your financials with these new numbers in mind and, if necessary, make any final edits to your budget and payment plan.
Start your first homebuying experience off the right way by contacting DiVito Dream Makers!
Article originally appeared on RE/MAX.