Are you a first time home buyer? The following tips are things I have learned from my experience helping clients secure loans and securing loans for our personal home and rental properties. It is safe to say that in this market today there are definitely some challenging issues, but there are still plenty of banks wanting to lend money.
It is important to shop for a mortgage. When shopping for a mortgage you want to find someone who is going to work for you. In my experience it has been helpful to find a mortgage broker that can shop your loan for you. A mortgage broker can put your file out to many lenders to get the best interest rate and terms for you. I would suggest finding a mortgage broker that can also offer you an FHA loan.
The FHA loan is a great way to go if you are a first time home buyer. There is often more paper work to be submitted with an FHA loan, but the payoff might just be what you need to get your loan approved. The broker will need two weeks pay stubs and two years of tax returns to get started. There will be more paper work needed before the loan is finalized but your broker will walk you through the process. The positives for the FHA loan are a smaller down payment required and the seller can contribute to your down payment. If you are concerned with your credit score the FHA requirements allow for a lower credit score. They are not so much looking at your score, but your payment history over the last year. It is important that you have made on time payments. If you have multiple lenders pulling your credit scores, keep in mind that within a 30 day period you can have your credit pulled as many times as you need for your “mortgage” and it only count as “one pull”. Basically, this is to allow you to shop the best loan for your needs.
I can tell you from personal experience that securing our first mortgage was not easy, but it was definitely the best thing we did for our financial portfolio. Don’t let this process intimidate you – it is truly worth the effort. By submitting your information to a broker you are finding solutions to owning your first property. Even if you end up not getting a loan right now, your mortgage broker will be able to tell you what you need to do to position yourself to acquire a mortgage loan in the future. Start growing your financial portfolio today!