When you start shopping for a car, you might be more concerned with additional features and specialty paint jobs than you are about the monthly bill. Unfortunately, the wrong financing can cost you dearly. Compound interest never sleeps, which means that you might be paying much more than you should if you work with the wrong lender. I want to help you to make great financial decisions, which is why I created this website. However, if you can remember a few tricks and keep those payments to a minimum, you can drive away with the car of your dreams without breaking the bank.
First-time homebuyers often feel very nervous about taking out their first home loan. While there is no doubt that a significant part of their jitters is due to the fact that a home mortgage is likely to be one of the largest financial transactions of their lives, their feelings can also be due to the fact that the process of obtaining a home mortgage is often said to be a difficult one with many hurdles to overcome. If you plan to purchase your first home in the near future and want to reduce the amount of stress involved in the process, here are four steps you may want to take prior to making your first home loan application.
Save up cash for a down payment and closing costs
Just having some cash set aside in an account to cover the closing costs and down payment allows a first-time buyer to enjoy a less stressful buying experience. In addition to being able to negotiate with a seller from a stronger position of power, a buyer who comes to the transaction with cash on hand will have no need to roll the closing costs into the loan and incur interest on them. Most lenders, including banks and mortgage lenders, also view buyers who have some cash savings for closing costs and the down payment as financially stronger applicants that will be more apt to meet their mortgage repayment responsibilities more easily than buyers who are less prepared.
Pay off excess debt
Another goal for first-time buyers in the months leading up to their actual purchase is paying off excess debt, such as credit card balances and car loans. Doing this reduces the applicant's debt-to-income ratio that lenders use to determine the loan amount that the buyer is approved to take out.
Verify credit report entries for accuracy
Taking a few hours to pull the credit reports from all three major credit bureaus (Equifax, Transunion, and Experion) to verify the information contained in each one is something else that all first-time buyers should do before applying for a first home loan. By doing so a few weeks or months before applying for a home mortgage, first-time buyers will have time to correct any mistakes to ensure that mortgage lenders get the most accurate version of their credit report.
Shop within a modest price range
First-time homebuyers who want the entire process of applying for a mortgage and purchasing a home to be as stress-free as possible should also take time to consider the price range in which they wish to buy. Keeping this figure as modest as possible will make qualifying for the mortgage easier, as well as make it easier to make the payments over the life of the loan.
To learn more about simplifying the home loan application process, first-time buyers should work closely with a reputable home loan lender or mortgage broker to prepare themselves and their finances.
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