5 Essential Tips for First-time Homebuyers to Avail Home Loans As a first-time homebuyer, you go through a multitude of emotions while buying home. It can be exciting and baffling at the same time. It is tough to imagine where to start and what to expect. But, you can figure out things with a little homework.
This article guides you through various tips and tricks to help you get loan easily.
Check your Credit Score- A prospective homebuyer’s credit score is the most important factor for availing loan for the first time. It has a direct impact on your eligibility to avail loan, the interest rates and the number of EMI’s. Just making your payments for what you buy does not necessarily put your credit score in place. There are various other factors which affect your credit score. You can get the credit reports generated online through various sources for free.
Evaluate Liabilities and Assets- Are you sure you don’t owe too much money? If not, find it out now! To avail loan for the first time, you should be aware of what you already owe
and what is coming. It is best to track your income and expenses for a month or two to understand how much you will be left with to repay the EMIs.
Get Your Documents in Place- To avail loan for the first time, a homebuyer must gather all the documents reflecting his incomes, assets, and taxes. Usually, mortgage lenders ask for previous two years’ W-2S (issued by IRS), tax return documents, and bank statements for the past couple of months.
Qualify for it Yourself- Although a mortgage lender can give you the information on how much you qualify for, it is your duty to analyze how much you can afford. A proper analysis of debt-to-income ratio and total down payment amount (including taxes) will give you a fair idea about the same. If you do not want to exhaust your savings and salary paying the EMI’s, a proper evaluation of assets, liabilities and your affordability will help you prevent uninvited troubles.
Check Your Down Payment- The down payment amount varies from state to state. Check for down payment support provided by the government. There are various government schemes such as the Housing and Urban Development (HUD), USDA and FHA plans to provide down payment assistance to first-time buyers of homes. It will free your burden to some extent.
If you are a direct commission salesman or self-employed professional, you may find it difficult to avail a loan because of issues such as lack of assets and low credit scores. You must follow the aforementioned tips to avail loan as a first-time homebuyer.
Source: https://www.playbuzz.com/neighborworksr10/5-essential-tips-for-first-timehomebuyers-to-avail-home-loans