Buying a home can be thrilling and nerve-wracking at the same time, especially for a first-time home buyer — it’s difficult to know exactly what to expect. The learning curve can be steep, but most of the issues can be resolved by doing a little financial homework.
The home buyer’s credit score is among the most important factors when it comes to qualifying for a loan these days. So, its’ important to get a sense of where your credit stands by first contacting a lender for a loan pre-qualification. This is the first and most important step when getting ready to buy a home. If your purchase is contingent upon you getting a mortgage, all sellers will ask you to fork over that approval at time of contract. Some loan programs will allow a minimum of a 580 credit score for a loan approval , however, many require even higher scores so its best to find out where you stand early. Repairing your credit can take months so knowing where you rank is very important.
Second thing, when you contact the lender, they will ask you how much you plan on putting down? They will also ask you about funds to close. So, review your checking and saving to see where you stand. A good lender will help bring you up to speed and inform you on what’s required for your particular situation.
Can you make a small down payment or none at all? Lenders often dispel the mistaken idea that home buyers have to make a down payment of at least 20%. In fact, some loan programs allow some qualified people to buy homes with no down payment. Other loans allow down payments as small as 3 percent or 3.5 percent. There are many rules and credit score requirements for all of these programs so again, contact a banker or mortgage broker who will be happy to help you plan for your future purchase.
You will need to keep some money in reserves after you purchase your home. Many people don’t think about this. Mortgage lenders don’t want you to deplete your savings on the down payment and closing costs. They want you to have “reserves” — cash, or assets that can be sold quickly, so you can take care of unexpected expenses without missing house payments.
So your thinking I’m never going to have enough cash to buy a home. Not true, anything is possible and if you make the right offer on a home, the seller can often help you with some of the closing costs and this will help you bring less cash to the table. I help people negotiate these deals all the time.
For more information about the Treasure Coast or buying in the area, just contact me by clicking HERE. I also have many videos on my youtube channel on home buying tips you can watch these on 772Living With Lisa.
