A Guide to Your First Mortgage

0
217

Are you thinking about buying your first home. The process can be a little daunting when you start looking into it. But, it’s really fairly easy. Here’s a simple step-by-step process to walk you through the entire home buying process.

Check Your Credit

You may already know what your current credit score is. If not, you can easily get a copy of your credit report. You will want to know both your credit score and if there are any negative issues on the report. Your credit is a big determining factor in what kind of interest rate you will be able to secure from a lender. 

Talk to Lenders

You will want to be pre-approved for a loan before you begin to look at homes. That way, you’ll have a better idea of what your budget is. And, it’s a good idea to talk to a few different lenders to see what your financing options are. Start with your own bank, and then maybe do some research and find a couple of other reputable lenders. They will all try to be competitive with their rates, because they want your business. In the end, you’ll know which financial institution is best for you.

Representation

You will want someone representing your best interests throughout the buying process. Real estate agents are trained to find properties based on your specific needs and budget. A real estate agent also takes care of making all of the appointments for looking at homes as well as the endless amount of paperwork involved. And, they are paid by the seller, not by you. You could even involve your own personal attorney, if it makes you more comfortable.

Look Around on Your Own

Even though you have an agent looking for properties for you, there’s nothing stopping you from doing your own searches to find your perfect home. If you find something that you like, just let your agent know, and they will be able to schedule a showing. You will still have the representation of a real estate professional even if you find the home on your own.

Make an Offer

Once you’ve found the home that you want, it’s time to make an offer. Your agent will run some numbers on what surrounding properties are selling for. Then, they will advise you on what to offer. It’s also a good idea to include any home inspection results as contingencies to your offer. Having the home thoroughly inspected is always advisable. Don’t be surprised if the first offer isn’t accepted. You and the seller may go back and forth until you agree on the price.

The Mortgage Process

Once the seller agrees to the offer, your real estate agent will get with the financial institution that you have chosen, and the mortgage process will begin. There’s not a lot of work that is involved from you, just a lot of information. Be prepared for the lender to dig deeply into your credit profile. They’ll also be taking a hard look at your income, investments, savings accounts, and any other personal financial information. There may be a lot of phone calls or email correspondence involved. But, it’s really just a waiting game. They are trying to get you approved for the loan as much as you want them to get you approved. The goal is the closing day.

Final Walk-Through

Finally, you’ll get a phone call from your lender telling that everything is approved, and it’s time to schedule the closing. You’ll also be allowed to walk through your new home one more time before you sign the papers, just to make sure the sellers have left it in good condition.

The Closing

This is the end of the process. You finally get to sign all of the paperwork and get the keys to your new home. Be prepared to sign a lot of paperwork. You will probably sign your name more than you ever have in your life.

And, that’s it. There’s nothing hard about getting your first mortgage. It just takes a little due diligence on your part, and some patience. Let everyone else do the hard work for you, and spend your time finding your perfect home.