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5 Steps You Should Take Before Buying Your First Home

The iServe Blog


When it's time to buy your first home, it may be a very stressful process. You need to find the right place, make an offer, negotiate until you reach a final price and then start filling out a residential mortgage application. But one thing most first-time buyers aren't aware of is the importance your credit and documentation can play in securing a home loan. Here are some steps you should take before exploring your residential lending options so that you may get the best possible terms and rates for your home loan before filling out a residential mortgage application:

5 Steps You Should Take Before Buying Your First Home

  1. Check your credit reports. By checking all three major credit report agencies, Equifax, Experian and Transunion, you can see if there are any incorrect or derogatory marks on your credit history. Sites like Credit Karma are free for at least two of the reports. If there are any problems, work on getting them cleared up as quickly as possible.
  2. If needed, build a credit history. Not much on the credit reports? Consider getting a credit card, student loan or other financing to help build a solid payment history.
  3. Secure documentation of income. Financial institutions like to see that you can pay for the home you're purchasing. Paycheck stubs work well to document a job, while prior tax returns are commonly used for self-employment income verification.
  4. Determine how much home you can afford: It's tempting to go for the maximum amount your income allows, but after you buy the house, you'll need to be able to pay for it.  Develop a monthly budget and determine how much you can spend on a mortgage. Remember that you'll also have home repairs, renovations and maintenance you're not currently paying.
  5. Save for down payment and closing costs: Before you start looking at homes, you'll want to save money for expenses related to purchasing it. Start at least a few months in advance of your purchase to save up for a down payment and the closing costs, even if you're considering going with a 100% financing mortgage. That way you'll have the money to make it happen if you need to make a down payment after all.

There are a lot of things that need to happen before a first time home buyer starts the process, such as checking credit, clearing up any outstanding bad debts, building a credit history, securing regular income or documenting self-employment income and similar areas of concern. This piece would cover those areas of note and others to help the first time homebuyer prepare for the home buying and mortgage approval process.

By taking these steps before you fill out your residential mortgage application, you can help ensure that your credit is in good shape and that you have some of the information you need to apply for a home loan. But what's next? Residential lending may be a difficult, time-consuming process with some lenders. IServe Residential Lending LLC (NMLS # 2914) makes applying for a home loan with a much easier process. Once you've finished getting your credit and financial documentation in order, fill out an online residential mortgage application or contact us today for more information.

 

 

iServe Residential Lending, LLC is not affiliated with or acting on behalf of or at the direction of the VA or the Federal Government.

Programs, terms and guidelines subject to change without notice. Not all applicants may qualify. All loans subject to underwriter and investor approval. Arizona Mortgage Banking License BK-0920658; Licensed by the Department of Business Oversight under the California Residential Mortgage Lending Act, CRML License  413-0646; Colorado Supervised Lender #988552; Georgia Residential Mortgage Licensee License #19613; Licensed by the New Jersey Department of Banking and Insurance License # 512567; Licensed Mortgage Banker—New York State Department of Financial Services License # B501014; (www.nmlsconsumeraccess.org). iServe Residential Lending, LLC, NMLS #2914-15015 Avenue of Science Suite 250, San Diego, CA 92128 Phone: (858) 486-4169