One of the most memorable milestones in life is purchasing your first home. You’ll learn new real estate terms, meet new people, and have plenty of adventures along the way. Not understanding the home buying process can take some of the joy out of the experience and cause stress. You can prevent this from happening by making sure you understand the basics when it comes to purchasing a property. These tips for first time home buyers should help you along the way.
? What Credit Score Should I Have to Buy a House?
Expect to need a credit score of 620 and above to get approval for a home mortgage loan from a traditional lender like a bank, credit union, or mortgage loan company. There are other loans with lower expectations when it comes to credit scores. The Federal Housing Administration (FHA) and the Veterans Administration (VA) often accept lower credit scores. However, these loans may come with higher interest rates and stricter standards when it comes to home inspections.
Because of the Fair Credit Reporting Act you can receive a free report annually from TransUnion, Experian, and Equifax. Go to the official Annual Credit Report website to order the reports. You’ll want to compare the three reports to check for errors and different information. If you find errors, report them immediately because the process of review can take some time. Make plans to clear outstanding debts. It’s also important to stay away from making other large purchases during this time that will impact your debt-to-income ratio and lower your credit score.
☑️ Why is Mortgage Pre-Approval Important?
You’ll want to get a mortgage loan pre-approval to help you pinpoint the target price range when searching for homes. Keep in mind that a pre-qualification and a pre-approval are different. The terms are often used interchangeably. A pre-qualification is a general idea of whether you may qualify for a loan. The information you provide is usually verbal and there is no hard inquiry on your credit report.
During the pre-approval process, however, your credit report will be accessed, and a hard inquiry will show up in the details. You’ll also need to provide documents to show proof of things like income and debts.
The pre-approval with give you the exact price range to begin looking for a house because it provides you with the expected loan amount. The pre-approval could also turn the tides in your favor if your offer to a seller has strong competition from another buyer who isn’t holding a pre-approval. The fact that you have the pre-approval shows the seller that your intentions are serious, and you plan to follow through with the purchase when the offer is accepted.
? Should I Create a Wish List for Buying a House?
You’ve probably spent countless hours dreaming of the home that makes your dreams come true. Put those things on paper to help you sort out the things that are non-negotiable and which ones are up for compromise. This list can help you stay focused when it comes to choosing between something you need and something you want in a home.
Once you’ve listed everything you want in a property, go back over the list and mark the items you consider a priority. Star the items you feel are not up for compromise. Share this list with us when we meet so we can use it to make sure you receive property listings that save you time and match the criteria.
?♀️ How to Find a Real Estate Agent to Buy a Home?
You’ve come to the right place for finding a real estate agent who genuinely cares about your experience and is happy to listen to your needs. Our goal is to help you find the home that makes you happy.
We suggest that you sign up for a free account that allows you to save searches for criteria that you find important when searching for homes. These search options can save you time and give you an edge over other buyers in the area. You’ll receive email alerts whenever a new home comes on the market that meets your criteria.
? How Do I Place an Offer on a House for Sale?
We’ll help you create an offer than is attention-getting and makes sense for your real estate goals. We’ll be there on your behalf to present the offer to the seller’s agent and receive a response. We’ll alert you to the response of the seller and move forward from there.