First-Time Homebuyer

1. Make Sure Your Finances Are In Order

First, you need to make sure that you’re financially ready to buy a house as a first-time homebuyer. Chances are that this is the largest purchase you’ll ever make in your life, so it pays to be prepared! Before making a purchase, make sure your finances are in order by:

• Reviewing your spending & making a budget – Budgeting is essential for your financial health, so review your spending and make sure you’ll still be able to cover your monthly costs, even with the addition of a mortgage payment.
• Looking at your savings – You should wait to buy a house until you have enough savings to cover your down payment, closing costs, as well as 3-6 months of emergency savings. It’s not a good idea to drain your entire savings account when you purchase a home.
• Considering your credit – A higher credit score means you’ll pay less for a loan. It’s not impossible to qualify for a loan with bad credit, but great credit could save you thousands (or tens of thousands) of dollars over the lifetime of your mortgage.

2. Determine Your Budget

Before you start looking for a home, you need to determine how much you can spend on a mortgage. As a rule, it’s recommended that you keep your housing payment under 28% of your gross (pre-tax) monthly income. This should include not only your mortgage but also property taxes and homeowner’s insurance.

The right amount to spend on a home may vary based on your income and budget, but this is a helpful “rule of thumb.” You can play around with a mortgage calculator to see how much you can afford to pay based on different down payments, loan lengths, interest rates, and more.

3. Explore Your Loan Options

There are a lot of different loan types available for your first home purchase – including conventional loans, jumbo loans, FHA loans, VA loans, and more. Not sure what the difference is between these types of loans? Click here to get a quick overview from the team at CSMC Mortgage, and to see which type of mortgage might be right for you.

4. Get Pre-Approved

Once you’ve determined how much you can spend on a home, you can get pre-approved by a lender like CSMC mortgage. Basically, this means that your lender will take a look at your finances, and determine how much it would be willing to lend you to buy a home.

Having pre-approval will help you throughout the process of shopping for a home, because it indicates that you’re serious about buying a house, and lenders believe that you are qualified to do so.

Note that pre-approval does not guarantee a loan. Once you have chosen a home, you will need to go back to your lender to confirm that you can take a loan out on the property you’ve selected.

5. Start Shopping For Your Dream Home

Once you’ve gotten your finances in order, decided on a budget, chosen the right type of loan for you, and obtained pre-approval, you’ll be ready to start shopping for the home you’ve always wanted.

And remember, if you need help or guidance, CSMC Mortgage is here for you. We specialize in working with first-time home buyers, and can help you make the right decision for your financial situation! Contact us now to get the expert guidance you need.