First-time homebuyers often have quite a few questions about what to expect throughout the process of purchasing their first house. One of the most important factors when buying your first home is finding the right mortgage lender who can help you get approved and find the best loan that suits your needs and financial goals. To make it easier, we have put together some tips on how to find the best mortgage lenders to work with you as a first-time buyer.
1) Know your credit score
The strength of your credit score is a big factor in getting approved for a mortgage. A mortgage lender will want to see evidence that you’ve managed credit responsibly to make sure that you can afford a home loan. If you have an imperfect credit history or have never used credit, then ask a family member or friend with good credit to co-sign on your loan application.
2) Find a mortgage lender you can trust
As a first-time homebuyer, you’re probably looking forward to that moment when you can sign on that dotted line and start calling yourself a homeowner. And while it’s exciting, you shouldn’t let your eagerness cloud your judgment when it comes to finding a mortgage lender. The last thing you want is to secure financing from someone who doesn’t take your best interests into account or is merely out for themselves instead of looking out for yours.
3) Understand how down payment works
If you’re a first-time homebuyer and don’t have a 20% down payment saved up, you can still get a mortgage—you just have to bring more cash to closing. A typical lender will require that you pay at least three percent of your home price in cash at closing as an alternative to paying 20% upfront.
4) Talk to other borrowers
One of the best ways to find a good lender is to talk to people who have already purchased homes. If you know someone who’s been through it, use that knowledge to help you narrow down your options. Chances are good that their lender was knowledgeable and well organized—these traits are what you should be looking for in your own lender.
5) Consider what type of loan is best
Choosing between a fixed or adjustable-rate loan requires you to take a look at your financial situation and long-term goals. There’s no wrong answer, but knowing what each option has to offer can help you make an informed decision. If you’re on a tight budget, an adjustable-rate loan could help you get in a home more quickly; if interest rates are expected to rise over time, it may be better to choose a fixed-rate loan.
When it comes to buying a home, there are many factors that need to be considered. Purchasing a home is one of life’s biggest financial decisions and finding a mortgage lender who you can trust is crucial. Whether you’re looking for an experienced mortgage professional with years of experience or someone who takes pride in providing excellent customer service, there are plenty of companies to choose from. These five tips will help first-time buyers find their ideal lender. Start your search today!
