Before looking for your first home, find a mortgage. Look for a reputable company and get pre approval. One thing that most people do is find the house and then try to get the mortgage, only to get turned down. If you already have a pre-approval, you know what you can spend and where to start looking. There are no questions, you have the money to spend.
If you get approval before you begin looking, it’ll give you the opportunity to sort out any approval difficulties you may have. That way you will know you that you have the loan and for how much. Having the paperwork done will also show realtors and sellers that you are serious.
It’s better to have a mortgage waiting to pay for a house, than to have a house you can’t get a mortgage for.
Look into the different types of mortgages and never go with the first company. You want to get the best deal you can, shop around to different mortgage companies. One may approve you for an adjustable rate when another won’t. Look into the terms of each company. If you need to refinance in a year, are there going to be penalties?
Look out for adjustable rates, sometimes people will use these just to get approval. An adjustable rate means your payment will eventually go up. With different companies, you can usually refinance after the first year and get a fixed rate. Then you’ll also need to know what the fees are for refinancing. Most companies won’t charge fees if you keep the mortgage with them when you refinance, but you need to ask and make sure.
How much will you have to have down? That will also vary by company and loan terms. How much do you have to put down? You’ll have to see what you can get approved for. Not a lot of companies will do 100% financing for a first time homebuyer. Most will do 90-95%, which could mean a hefty down payment. You can try for a low or no down payment, but it may cause problems in getting approval. So count on 10% down.
Maneuvering in the world of getting a first mortgage can be confusing. Just remember to ask all questions up front. There are no silly questions when it comes to getting your mortgage. You’re establishing a relationship with a company that might last up to 30 years. You should know everything before entering into that relationship.
