Getting your first mortgage is intimidating – how do you know if you’re getting good terms, and what do you need to do to qualify for financing for your new home?
As millennials age – the oldest ones are now in their mid to late thirties – more and more are looking for funds for their first homes. But as a millennial, you probably haven’t seen the mortgage process before, so what do you need to do to prepare?
These tips will help you find the right mortgage and make sure that you step into your potential lender’s office informed and ready-to-go.
Consider the Usefulness of Technology
With digital technology, it has become more accessible than ever to find and get approved for a loan in minutes. While that may sound appealing, by skipping local California lenders you’re losing out on the knowledge and local resources they have, as well as in-person support.
Determine Whether you Qualify for Special Loan Types
A huge deciding factor when it comes to buying a house is the price. Given that your down payment will be 20% of that amount when you get a conventional mortgage, you could be looking at more cost than your savings allow. Instead, consider looking into FHA loans, which are designed to help first-time buyers by offering down payments as low as 3.5%. If you are a veteran, you can look towards VA loans that come with no down payment.
Remember the Debt you Already Hold
One of the first things lenders will consider is your finances. No lender wants to offer a mortgage to a borrower that already holds significant debt – not only are there concerns about on-time payments, but that lender might be last in line when it comes to recouping their losses should you default. If you have substantial student loan or credit card debt, you may want to wait to pay that off before trying to take on more.
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