Courtesy of Chase Bank
With rising mortgage rates and stiff competition, many first-time homebuyers are feeling overwhelmed by the prospect of purchasing a home. However, being well-prepared can help buyers make confident decisions. From factoring in extra expenses to identifying the best loans and grants, taking the right steps can have a significant impact. The market can be confusing, which is why Felton Ellington, Lending Manager at Chase Home Lending, is sharing some expert tips to help you audience navigate today’s challenging housing market.
• Consider The Additional Costs: Beyond a down payment, homebuyers must consider closing costs, which are used to pay for appraisals, inspections, and other fees and can amount to up to three percent or more of the final purchase price. These services are crucial in the homebuying process. First-time homebuyers should research the assistance programs they may be eligible for to assist with the cost of down payments and closing costs.
• Stick to Monthly Budgets: Homeownership comes with a lot of responsibility, beyond the mortgage payment, such as repair and maintenance costs, property taxes, etc. Before you purchase, prospective buyers should “practice their payment” to prepare themselves for what it will be like to have a mortgage. This can help get you financially and mentally prepared for the investment.
• Get Pre-Qualified: Work with a trusted home lending advisor to determine how much you can afford and get pre-qualified for a mortgage loan.
• Review Your Qualifications: Before beginning the home search process, work with a home lender to determine how much you can afford, and your qualifications, and get pre-qualified for a mortgage loan. Have all your documents, such as tax returns, paycheck stubs, W2s, etc., in order for your lender to review to determine your qualifications. Beyond supporting documents, lenders will also consider your credit score and debt-to-income ratio (DTI). It’s important to stay in good financial standing, be on time with payments, and avoid making major purchases when applying for a mortgage.
• Shop Around: Shop around for the lowest rates. Some buyers are reluctant to shop around for rates because they fear it will impact their credit score. However, credit checks from different mortgage lenders are treated as a single inquiry on your credit report as long as all the inquiries are made within the same 45-day window. This means five different lenders could pull your credit within a week or two of each other and the impact would be the same as one lender pulling your credit.
• Make the Most of the Relationship With Your Bank: Many banks offer discounted rates to their current customers who meet certain criteria, so be on the lookout for your bank’s relationship pricing options.
