It is so exciting to buy your first house! It's the financing that can be the scary part!
Deciding how much to spend, choosing what type of mortgage that will work best for you, not to mention understanding the paperwork... the whole process can be overwhelming. Here are some tips from industry insiders that will ease your first time homebuyer jitters:
- Get familiar with the lingo.
- Decide what you can actually afford to pay on a monthly basis, and don't forget to factor in insurance and any association fees. Calculators can be found on most real-estate-focused websites.
- Pay down your debts. Credit card debt limits what you qualify for from a lender. Lenders want to see a total debt service ratio that is less than 40% of your monthly income.
- Take the time to attend a first-time home buying seminar or talk to a credit counselor - one who doesn't work for a lender.
- HUD also has a handy booklet on its site called “Buying Your Home: Settlement Costs and Helpful Information.”
- Get pre-approved for a loan! It may seem like a no-brainer, but when you have a pre-approval, you will be taken much more seriously when it's time to make an offer.
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