Tips for the Home Buying Process

As the housing market continues to rise and interest rates remaining attractive, first-time homebuyers are looking to purchase. Buying a home can be an easy and enjoyable process if well prepared.

Buying a home should not be a frustrating process. To be prepared and confident in the process, a mortgage applicant should know, roughly, what their credit score is before applying for a home loan. The difference between good credit score and an unappealing one is the interest rate offered to an applicant. All home buyers and investors want the lowest interest rate possible; the best way to ensure a low monthly payment on a mortgage is to apply for a loan when your credit score is strong. To reach a good credit score the individual must prove that they paid, on time, a range of financial obligations. If the applicant has missed a few large or important payments in the past, such as a car payment or credit card minimum payment then a credit risk will present itself causing the lender to raise the interest rate.

Once the credit check process is completed the applicant should know their mortgage rate and amount they may borrow. From this point he or she can filter their property and judge how much to spend in relation to a comfortable monthly payment. A good rule of thumb is to find a home no more expensive than the homebuyer's annual income times three. This way the homebuyer is not purchasing something that is not difficult to afford nor is there a great possibility of a large loss of equity in a market down cycle. With foreclosure rates declining, lenders are eager to hold the current market trend positive.

Katz Mortgage Team offers a number of tools and useful information to first time homebuyers on their website!

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