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Tips For First Time Home Buyers

January 28, 2021

A first time home buyer is holding a replica of his homeHome buying is an exciting process, but first time home buyers often get overwhelmed by all the steps that are required. In addition, understanding the financial aspects of buying a home can be challenging. It is helpful to prepare in advance if you are a first time home buyer, learning what you can afford, how down payments work and getting pre-qualified.

Helpful Tips for First Time Home Buyers

Every homebuyer has a unique experience, and you should evaluate your own needs and preferences during a home buying process. Of course, working with a mortgage broker can help make the home buying process easier if it is your first time. They can offer advice, ensure you have all of your questions answered along the way and most importantly, connect you with home sellers for ideal properties that are within your budget.

However, there are also certain universal tips that every first time home buyer should follow to make the process of finding your ideal home for a friendly price easier, quicker and overall more effective.

Calculate What You Can Afford Before Your Search

Calculator and other items on a desk. First time home buyers can use mortgage calculator to keep track of their budgetBefore you begin searching for your dream home, you should consider what you can reasonably afford. Many lenders require or strongly suggest that you do not exceed a monthly mortgage payment that is more than 30 percent of your monthly income after taxes. Many lenders also encourage prospective home buyers to have a debt-to-income ratio of less than 40 percent.

You can use a mortgage calculator to determine how much you can afford as well. For example, if 30 percent of your monthly income is $1,200 and you expect to pay approximately a four percent interest rate over the course of thirty years, then the cost of the home you purchase should ideally not exceed $250,000.

Understanding how much you can afford to comfortably spend on your home helps you avoid overspending and lowers the risk of defaulting on the loan or having financial complications in other areas of your life.

Compare Down Payments

The type of loan you receive dictates the amount that is due for a down payment. Certain loan programs such as VA and USDA home loans offer 100 percent financing, although these programs are more restrictive and harder to obtain. FHA home loans only require 3.5 percent down, but they require mortgage insurance with lower down payments. Conventional loans may be available at lower rates, but they typically encourage a 20 percent down payment.

If you have saved money, then paying more at closing can offer key benefits, such as avoiding mortgage insurance. If you prefer or are only able to come up with 3.5 percent down payment or less — which is the case for many first time home buyers — then an FHA, USDA, VA or conventional loan that offers lower down payments is your best option.

Get Pre-Qualified

First time home buyer signing on a document while a hand holding the cutout of a home is in the foregroundBeing pre-qualified often gives homebuyers an edge over prospective buyers who are not if there are multiple offers on a home. For first time home buyers in particular, getting pre-qualified is important. A mortgage broker can help you obtain a pre-qualification letter, which lets home sellers know that you are serious about buying a home and able to receive funding for the home you are interested in purchasing.

Getting pre-qualified offers other benefits as well. In some cases, first time home buyers are able to lock in their mortgage rate ahead of time once they are pre-qualified. This means if rates go up, they are not obligated to pay the higher interest. However, if rates go down, they are still eligible to receive a lower interest rate.

Find Your Perfect Home Fit

After you determine how much you can afford to spend on a new home, determine the type of loan you wish to pursue and are pre-qualified, you get to start searching for your dream home. This is where the fun begins, and you and your spouse and family can browse for homes online, attend open houses and ultimately decide on which home you would like to call home for the foreseeable future.

At this point, you should have a good idea of the area you wish to live in and the type of home you would like to purchase. Be sure to consider the financial components of each home you look at and weigh the opinions of your family and friends as you decide on which home is the perfect home fit for you.

Work With MyLendingPal For First Time Home Buyers

MyLendingPal is here to make your life easier. If you are a first time home buyer, reach out to us today to get the help you need before you start your home buying journey. We can answer your questions on the initial call and provide you with more insights into how we can help you secure a home mortgage fast and stay within your budget.

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MyLendingPal, Inc, NMLS ID #1734346, (www.nmlsconsumeraccess.org); Corporate Office: 5400 Laurel Springs Parkway, Suite 304, Suwanee, GA 30024. Georgia Residential Mortgage Licensee #61544. Principal Loan Originator: Ricky Merchant, NMLS ID: 1517056. Georgia License # 54264. For questions regarding state licensing, please contact (404) 433-8918. Not all products and options are available in all states. Terms are subject to change without notice. Any rates or terms are speculative only and can change without notice.
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MyLendingPal, Inc
MyLendingPal, Inc
5.0
Balachandar Sundaresan
Balachandar Sundaresan
17:30 23 Jun 20
Roger Merchant and his team were very helpful, right from getting a great rate to completing all process on time and being super responsive. Would happily recommend him!!
Dinesh Nair
Dinesh Nair
14:41 30 Jan 20
I would definitely recommend MyLending Pal for all mortgage needs. It all started with a great competitive quote on refinance and excellent service continuing all the way until closing. Priti, Ricky and Roger were a pleasure to work with.
Ramesh Kumar
Ramesh Kumar
02:03 17 Dec 19
I would really recommend Nations First Home Mortgage, if you are looking for the best home mortgage options. I was very much glad to work with this team and they have saved lot of time and money!!
gulshan rai
gulshan rai
03:21 17 Apr 19
I would highly recommend Mr Roger to anyone in the area looking for an amazing lender. He made the mortgage process so easy and effortless. I could tell him and his team were very attentive to all the details that came with applying for a mortgage and were quick to remind me of any deadlines that were approaching.It was super easy to work with Mr Roger.My special thanks to preeti who did an amazing job to get things done in the timely manner. If I had any questions, it was almost like she was waiting at her desk for my phone call to answer the questions immediately. The loans closed on time and without a glitch. I would highly recommend them to anyone
Ajith Nair
Ajith Nair
01:50 13 May 19
We highly recommend Roger for financing mortgage. Roger and his team were excellent through out the process and we had a very smooth purchase. They were always available when we had any questions. It was an amazing experience working with Roger and his team.
Pratul Patwari
Pratul Patwari
13:03 20 Jul 20
Roger Merchant and Priti Vin helped us in buying our first home. They understood our needs and took care of everything for us. They were very good with the communication through the process. They will always be my first choice in future for the mortgage services.
Sujatha Hariharan
Sujatha Hariharan
20:51 26 Jul 20
They were able to find me great rates. Service was quick and communication prompt. The loan process can be daunting as is the document gathering process but this was the easiest and quickest that I have experienced. Highly recommend!
Dinesh Nair
Dinesh Nair
15:53 30 Jul 20
I would definitely recommend MyLending Pal for all mortgage needs. It all started with a great competitive quote on refinance and excellent service continuing all the way until closing. Priti, Ricky and Roger were a pleasure to work with.
Manu Pushpanath
Manu Pushpanath
15:59 29 Jul 20
Great lender to work with. Right from document collection till closing they did it in 2weeks. The fastest closing I heard and get to experience myself. One improvement I suggest is it will be good if the closing attorney can come into the house for completing the closing. Considering current situation it will add a lot of value to the reputation. Thanks Milan and team for a good closing experience.
Sakthi S
Sakthi S
20:46 01 Sep 20
Would definitely recommend Roger and his team.Refinanced for the second time and with roger, I didn’t feel like I refinanced.The process was very smooth and fast.The rates were very competitive and it was amazingworking with Roger and his team.I’d recommend him for sure.
Sunny Patel
Sunny Patel
21:17 01 Sep 20
They were quick, courteous, and professional. They got me an excellent rate and helped make the process smooth. I would recommend using to my friends and family!
Emmitt Rathore
Emmitt Rathore
14:57 22 Dec 20
Roger helped us find an unbeatable rate!His decades of work in the industry made it easy for us to complete many processes with the lender, and helped us close on time!I will definitely be passing the good word around and recommending family and friends to him.I look forward to our next real estate transaction with them.
M Alamoti
M Alamoti
01:02 11 Jan 21
I had the experience of using their service. They know what they are doing. They are very honest, professional and caring. I have no doubt and hesitation to recommend them to anyone who is looking to purchase a home. I am very pleased for their service.
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