It is always an exciting time when you decide that you want to buy your first home. They always say that money spent on renting a home is wasted when you could be using that money to pay the mortgage on a home that you will eventually own outright.
But it’s worth remembering that one of the reasons that caused the real estate market crisis of the early 21st-century was due to individuals borrowing more money than they could afford to pay on their mortgages.
And it’s natural, as many first-time homebuyers are likely to get confused when researching and trying to understand the home buying market. With the different types of mortgages, direct and indirect lenders, and a whole host of other things to consider, seeking help from the right people would not be such a bad idea. When stepping into the homebuying shoes, consider contacting Dustin Dimisa or other mortgage specialists who have the necessary experience and can also understand your needs to better guide you through the process. When it comes to obtaining a mortgage on your new house, you want to make sure that you don’t overshoot your budget and end up with something you cannot handle.
For now, to ensure that this and any other typical first-time buyer mistakes are not made, here is a handy guide to help you buy your first home the right way.
Something that a lot of people tend to get carried away with is going to view houses within a budget that they “think” they can afford.
The problem here, is unless you can 100% guarantee that you will be able to afford your monthly mortgage payments as well as all of the other usual monthly bills you will have to pay out for, then you should not be buying a house – or at least, the one that you thought you could afford. Maybe you should consider contacting a company that offers Denver Home Loans. They should be able to help you find the best mortgage loan for the homes you like. Then, you just have to work out if you can afford that repayment or not.
You should sit down and calculate what your regular monthly outgoings are, and determine how much money you have left over that you can comfortably afford to spend on mortgage repayment.
One factor that can affect the types of mortgages that you would be eligible for is your credit score. If you have a history of borrowing money and paying it back late, or you have taken out a lot of credit, then it is highly unlikely that you will be able to get a mortgage that offers good rates.
But if you have been careful with your borrowing, and you either repay any loans or credit cards back in full or in a short period of time, then you have a better chance of getting mortgages with favorable interest rates, such as those arranged by mortgage brokers in Washington DC.
Home buying programs
Many states offer home buying programs that can help you fulfil the American dream by buying that dream house. You should check out the U.S. Department of Housing and Urban Development’s website for more details of any Home buying programs in your state.
Traditionally, lenders typically required a 20% cash deposit upfront before they would give you a mortgage. These days, you will be able to find lenders that are willing to accept anything from 0% to 20% upfront.
In order to secure the best rates and terms for your mortgage, you should come up with 20% upfront.
Anything less and the lender will usually impose stricter criteria for a mortgage, such as requiring applicants have nothing less than a squeaky-clean credit score, or requiring that you take out something called Private Mortgage Insurance, or “PMI” for short.
This is to guarantee that the mortgage will be paid in the event of you defaulting on your mortgage.