7 Tips For the Clever First-Time Home Buyer
Buying a home is easily one of the top five most adultish things you can do. As such, it can seem incredibly intimidating, but don't let your insecurities and a lack of information derail your dreams of owning a house! We asked Kelly White, VP of strategic growth at Sente Mortgage, for advice on taking the fear out of first-time purchasing, so keep scrolling for the best tips to add to your house-buying checklist.
Conduct research online.
Online services have made it very easy to search for homes, access comparable home prices, and research neighborhoods like never before. It's also connected buyers and created online communities, giving them the opportunity to better validate information throughout the transaction to feel confident about their decision.
Utilize social media.
Thanks to social media, home buyers can call on family and friends to provide recommendations and expertise throughout the entire process. It's aiding in the discovery process, helping buyers find neighborhoods they may not have otherwise heard of, and giving them ways to research those neighborhoods, their potential neighbors and schools, and generally better vet the locations they're considering.
Don't agonize over finding a massive down payment.
It's important for first-time home buyers to realize that having a 20 percent down payment is not a strict requirement when it comes to qualifying for a mortgage. Partnering with a professional mortgage banker early on can help first-time home buyers better understand their current financial situation and explore different financing options to fit their short and long-term financial goals. In many cases, even without 20 percent to put down, owning makes more financial sense than continuing to rent.
Begin the process early!
It's important to partner with a lender early on — even before starting your home search. The right lender can help you understand what you can realistically afford. And especially in markets with low inventory, being preapproved in advance can help in multiple offer situations. What's more, the right lender can help you understand what you can afford.
Working with a local mortgage bank that understands your market and specializes in mortgage banking can help expedite the process and keep you from becoming a number in a queue. Local mortgage banks that sell directly to Fannie or Freddie have fewer overlays, meaning less documentation needed and easier terms to close.
Avoid large purchases during the approval process.
Once you have applied for a mortgage loan, it is important not to open other credit accounts or make any large purchases on credit, as it could impact your approval and the terms of the loan. An innocent purchase such as buying furniture on credit could produce a cascade of unintended consequences that could affect the closing date and other terms of the loan.
Effectively manage your credit card debt.
Consistently pay more than your minimum credit card balance and avoid opening higher credit to improve chances of mortgage loan approval. Looking to improve your score? Reduce your balances and make sure payments are always on time.