Buying your first home is a stressful, confusing process if you try to do it yourself. Learning every part of every regulation is a full-time job. It’s what companies like us are for, really. You go to a doctor when you’re sick, you call a contractor to pour concrete, why not call an Expert in to help you buy a home?
Simply put, it’s the biggest purchase you’ll ever make, why not make it with an expert on your side?
Before we do that, though, if you’re reading this, you’re obviously interested in buying your first home. We want to help you out a little, and make the process as smooth as possible, so we can get you from pre-approved to closed as quickly as possible (and save you the most money)! Here are four things that you can start to work on NOW to help you prepare for the process of buying a home.
Read Your Credit Report
Your credit report is the single most powerful weapon, for or against you, in the mortgage process. Having your score up or down a few points can cost or save you thousands of dollars over the life of the loan. It’s vital that you understand your report, and be prepared to fight for your credit score.
The first thing to do when you’re applying for a new home is to pull your credit report. Check it over for inaccuracies and false reports. This seems silly, but it happens quite a bit. If there is a false report on your credit, appeal it, and try to get it removed. People have had their credit ruined with identity theft, and companies have made mistakes in filing that cost applicants thousands.
Then, once you have your credit report correct, start working on lowering your debt-to-income ratio. Your DTI should be fairly low as a first-time homebuyer, with you ideally utilizing less than a third of your available credit.
We will need to see a bunch of stuff. We’re deciding if you can be trusted with a loan of thousands of dollars, after all! To help us get a complete picture of your financial health and deliver you the lowest rate on your mortgage, we have to have all of your paperwork. This isn’t necessarily everything we’ll need, but it will get you most of the way there.
- Paycheck Stubs
- Bank Documents
- Investment Documents
- Tax Documents
- Profit Statements (Only if self-employed)
- Proof of income from rental properties
- Proof that a gift is not a loan
- 12 months of canceled rent checks and bank statements
- Divorce decree
- Proof of age of children in child support is involved
- Bankruptcy discharge paperwork
See? It’s a bunch of stuff. So start collecting it. If you have it ready before you apply, it will make the process go much more quickly.
One thing we hear a lot from people who are renting instead of buying is that they can’t afford a down payment. It’s not easy to save for one, especially with rent rising every year. If you want to be a homeowner, though, you need to bite the bullet and start putting money away.
Luckily, it’s not a “20% down or no house” world anymore. FHA, VA, and USDA Loans all will help you buy a home and move in with far less down. A VA Loan, exclusively for Veterans and their spouses, is a no money down loan, with 100% financing available and no mortgage insurance required. An FHA Loan requires 3.5% down typically, and comes with a (Currently) .085% PMI rate. It’s still a great deal if you don’t have 20% to put down on a home and want to move in while interest rates are at these historic lows.
Approval Before You Shop
When you call us, we run you through and get you pre-approved. This way, you know what you’re going to be able to afford on your home, and you can shop with confidence. You can make a firm offer on a home knowing that you’re already approved for that amount. It’s like having a Golden Ticket.
If you haven’t yet gotten approved, what are you waiting for? Take advantage of lower mortgage rates to buy your first home. Call us in St. Louis at (314) 781-9700, Chicago at (773) 770-6438, Indianapolis at (317) 550-1515 or Nashville at (615) 810-8555.
You can always apply online at www.thehomeloanexpert.com, and we’re also open on Saturdays to better serve you. Nobody gets lower rates on better loans than The Home Loan Expert, Ryan Kelley, why go anywhere else?