If your career has taken off and you cleaned up a lot of your credit problems and minimized debts in your life, you may be ready to take on a mortgage. Buying a home is a big step for most individuals, and it can be a great investment for your future.
There are a lot of things that you will have to consider, and you will want to find a company that offers FHA loans if you are a first-time homebuyer. Do the following to get started with the home buying process.
Compile Financial Specifics
All of your finances will be under examination. Documents that must be provided to the loan officer working on your application include:
- Past 3 years of tax returns
- Banking statements from the last 2 years
- Debt documents
- Verification of income
The lender will want to see what your debt-to-income ratio is, how much you could afford to pay a month, and how good your credit score is. After all of this is calculated, they will let you know if you could get approved and what the amount will be.
Get a Recommendation
If you have been leasing a house or apartment for the last year or more, and you have always paid your rent on time, ask the landlord to write you a letter for the mortgage company. Not all rental property owners report to credit companies, so if yours does not, you are missing out on improving your credit score and showing your positive housing payment history.
Interest Rate and FHA Benefits
Some lenders will provide benefits for first-time homebuyers and allow them to get a low-interest rate and to put less money down than with a traditional loan. You will want to get a fixed interest rate that you can afford and avoid a variable interest rate that will go up in a few years' time.
Once you are working with an FHA loan officer and your application is with the underwriters and getting processed, you can start to browse houses. If you are interested in walking through houses, you will want to get a real estate agent and go from there. Talk with the loan professionals so you can get started filling out your application to get your house so that you are ready to make an offer on a property if you end up finding something that you want to buy.Share