A Guide To Getting Your First Mortgage
Getting a mortgage can be a bit intimidating if you've never had one before. Of course, some lenders
will help walk you through everything, but it is better to know what you're doing and what you can
afford before you speak with a lender. This way, you can make sure you aren't paying too much in
interest or fees for the mortgage and the home you want to buy.
What to Know Before You Start
Before starting, take the time to look into your finances carefully. You'll need to know exactly how much you make and how much you spend each month. It's also a good idea to look into how you can save money for a down payment and start thinking about how much you can afford to spend on a house after the down payment.
Check on Your Credit Score
The credit score will be the biggest impact on the interest you pay, so it's a good idea to check your credit score and history at the beginning of this process. If your credit score is lower than expected, check for any errors and learn what you can do to improve the score before applying for a mortgage. The higher your credit score is, the lower your interest rate will be.
Find Out What You Can Afford
Create a budget showing how much you can afford to spend on the mortgage each month. Remember, this won't just be the amount you spend on the house itself. There will also be interest, property taxes, insurance, repairs, and maintenance that will need to be considered in the mortgage. Online calculators can give you a good idea of what you may be able to afford.
Keep an Eye on Mortgage Rates
Start reading more about the current trends for mortgage rates and learn more about points. It is possible, in some cases, to pay points and get a lower interest rate on the mortgage. As you're looking for homes, it's still a good idea to keep an eye on the mortgage rates so they don't increase before the loan closes if you don't have an interest rate lock.
Pick Out a Lender or Broker
Start looking for the right mortgage broker or lender to work with. A broker can help you look into different lenders to find one that's going to be right for your needs. This may not be the lowest offer, but they may offer services for first-time buyers that could be helpful.
Save Up the Down Payment
The down payment is a vital part of getting a mortgage, and in most cases, you'll want to save at least 20% of the home's cost. If your down payment is lower than this, you'll likely be required to pay for mortgage insurance by the lender. Look into what can be used as a part of the down payment, as you may be able to use gifts or other sources of money as part or all of the down payment.
Once you've gone through these steps, gather any financial documents you have, like bank statements or tax documents, and talk to a lender. They'll be able to walk you through the pre-approval process of getting a loan. Once you know how much you can borrow, it's time to start looking for the perfect home to buy.
Now that you have all the information to get your first mortgage you can start searching for your dream home. Metro Places offers all the elements for a great life. Browse our portfolio of master-planned communities with new homes throughout the Tampa Bay area and see which is the best fit for you. Contact us to schedule a tour today.