There are many different types of mortgage programs out there, but as a first-time home buyer, you should be aware of the three basics: adjustable rate, fixed rate and interest-only.Īdjustable rate mortgages (ARMs) are short-term mortgages that offer an interest rate that is fixed for a short period of time, usually between one to seven years. Step 6: Get the Right Mortgage for Your Situation Once you've agreed on a price, you'll make an earnest, which is money that goes in escrow to give the seller a sign of good faith. Somewhere, you have to meet in the middle. But you don't want to go back and forth too much. The seller may make a counter-offer to which you can also counter-offer. Once you've made your offer, don't think it's final. You can also get a list from your real estate agent to find out how much comparable have sold for. A decent place to start is about five percent below the asking price. Most sellers price their homes a bit high, expecting that there will be some haggling involved. Now that you've found the home you want, you have to make an offer. Take into account your safety concerns as well as how good the rate of home appreciation is in the area. Once you've made a list of your must-have's, don't forget to think about the kind of neighborhood you want, types of schools in the area, the length of your commute to and from work, and the convenience of local shopping.
How big do you want the kitchen to be? Do you need lots of closets and cabinet space? Do you need a big yard for your kids and/or pets to play in? Ask yourself how many bedrooms and bathrooms you'll need and get an idea of how much space you desire. Make a list of the things you'll need to have in the house. Besides, your offer will look more appealing than other buyers since your financing is guaranteed. That way, when you're ready to make an offer, it will make the sale go much quicker. However, you could even take it one step further by getting an actual approval before you start home shopping. The lender will actually pull your credit and get more information about you. Qualifications are only a guess based on what you tell the lender and are no guarantee, whereas a pre-approval will give you a better idea of how big a loan you qualify for. Once you have the right mortgage lender, make sure you at least get a pre-approval. Make sure to find someone that you are comfortable with and who makes you feel at ease. Ask lots of questions and make sure they have answers that satisfy you. Talk to at least three or four mortgage lenders. Get recommendations from your friends and family and check with the Better Business Bureau. To find the right mortgage lender it’s best to shop around. Step 3: Find the Right Lender and Real Estate Agent An experienced home loan expert can help you understand all your loan options, closing costs and other fees. There are loans available with little to no down payment. Remember that you don't always have to put down 20 percent as your parents once did. Don't forget to factor in money you'll need for a down payment, closing costs, fees (such as fees for an attorney, appraisal, inspection, etc.) and the costs of remodeling or furniture. There are several online mortgage calculators that will help you calculate an affordable monthly mortgage payment.
You can calculate how much you can afford by starting online.
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You can also check your credit score for free at Step 2: Figure out How Much You Can Afford Don't forget to check your report for errors. Scores range from approximately 300 to 850 generally, the higher your score, the better loan you'll qualify for. According to the law, you're allowed to receive one free copy of your credit report per year. Steps to Buying a Home Step 1: Check Your Credit Report & Scoreīefore getting a mortgage or any kind of loan, you should always check your credit.