Buying a home for the very first time can be daunting for most of the owners, as it is quite a demanding task. You cannot claim the equity on your home. However, it is not an absolute no-no situation, as you can avail a loan package that could be modified according to your needs.
Before you avail the first time home buyer loans, you need to plan your needs. Follow these steps to make use of the golden loan opportunity while building your dream home.
- Verify your debt to income ratio. Remember that mortgage companies do not sanction loans to those who carry huge amounts of outstanding debt. You need to get in touch with the lenders for an acceptable debt to income ratio. It may vary in different locations. Try to bring down the debts if you have a high debt with respect to your income, to avail first time home buyer loans.
- Prepare a budget for verifying the amount you can spend on your home. You should not forget to include the running expenses while building a new home. It includes taxes, insurance, maintenance costs, homeowner association payments due, and so on. Make sure that you add all additional expenses, and make calculations based on the current rates. Verify the amount you can spend on your home after arriving at the expenses.
- You can get the help of a real estate agent for finding a new home along with acquiring first time home buyer loans. The agents have good knowledge of the market situations and can help you in acquiring a homebuyer loan. In fact, real estate agents can be relied upon since they do not get any money, until you have found a home that fits your specifications.
- You need to get your free credit report. Usually, mortgage lenders insist on credit reports to check if the borrower is credit worthy. Remember to include the credit report of your spouse, if she is also included in the loan. Make sure that you get a copy of the most recent credit report.
To ease your financial woes, ensure that you apply for a preapproval loan. It could help you understand the amount the bank is going to disburse to your home loan account. You can avoid further monthly payments by making down payments on 20% of your home’s worth. Also, verify the estimated closing costs before it surprises you at the most inappropriate time!