Are you in the market for your first home? If so, congratulations! Buying a home can be a great investment and provide plenty of stability and happiness for years to come.
However, before you start shopping around for your dream home, it's important to shore up financing. Securing a mortgage is typically the biggest hurdle for first-time homebuyers, but with careful planning and some polite persistence, it can be done. This guide will teach you everything you need to know about securing a mortgage as a first-timer.
Understand Common Mortgage Programs
When you start shopping for a mortgage, you'll quickly realize that many things are involved before you get approved. To make informed decisions, you'll need to understand what's available to you. There are many programs for first-time homebuyers, so do your research and find the one that best suits your needs.
A few of the most common mortgage programs for first-time buyers include:
Oftentimes, the amount you get approved for will depend on things like your credit score, employment history, and down payment size.
Save, Save, Save
One of the most important things you can do when trying to secure financing for a home is to have a healthy savings account. Lenders will want to see that you have some skin in the game, and having money saved up will demonstrate your dedication and commitment to the purchase. Ideally, you should have between 5 percent to 20 percent of the home's purchase price saved up for a down payment.
If you don't have that much saved, don't despair. Programs available for first-time buyers can help you with a smaller down payment. However, keep in mind that you may have to pay private mortgage insurance (PMI) if your down payment is less than 20.
In addition to a down payment, you'll also need money saved up for things like closing costs, moving expenses, and any repairs or renovations you plan on making. The more money you have saved up, the better off you'll be.
Saving can be difficult, especially if you're already struggling to make ends meet. But with a little bit of discipline, it can be done. This way, getting approved for a mortgage and buying your first home will be much easier.Share
7 July 2022
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