Tuesday, July 21, 2020

First Steps for First Time Home Owners

First Time Home Owners holding boxes

Buying your first home is part of the American dream and a big life step! If you’ve made the decision to become a homeowner you may be tempted to hit up every open house you can and find new listings on the web. Before you start your search to find your dream home there are some important first steps you should consider first.

There are a lot of challenges when it comes to purchasing your first home. By obtaining a pre-approval from the lender of your choice you can show realtors you are committed to purchasing and have the funds to back it up. Here are some commonly requested items you will need for the process, according to the Home Buying Institute
  • Social Security number
  • Proof of employment
  • Proof of income (typically your past two pay stubs)
  • Tax documents (typically for the past two years)
  • Current place of residence
  • Bank account statements
  • Credit information (if you have it; they will also run it as well)
  • Purchase agreement
  • Gift letters (if family members are going to provide funds to help you cover your down payment).
  • Monthly expenses (insurance, phone, car, student loans, etc.) 
  • Self-employment documents 
Use online tools
Unlike the past, these days you can use numerous tools to help you narrow down your perfect home based on what you can afford. A mortgage calculator has fields for home value, down payment, loan amount, interest rate, terms, HOA, PMI and credit rating that will easily give you an estimate within minutes of entering the field.

Avoid opening new lines of credit 
When it comes to purchasing your home, your credit score is taken into consideration. Opening new store cards or taking out a loan for a vehicle is not a good idea until you’re established in your new home. 

Have an emergency fund set aside
Nobody likes to think of worst-case scenarios but emergencies do happen. On average, lenders recommend having 3-6 months of net salary set aside for unexpected emergencies such as a car repair, loss of a job, or medical emergency so you are still able to cover your mortgage payments. 

Take advantage of first-time home-buyer programs
In the past, you may have needed 20% down for a home purchase. Today there are many first-time homebuyer programs available that require considerably less. If you have dismissed the thought of owning a home because you don’t have 20% down, talk to your lender to see if you qualify for a residential home loan program that is best suited for you. 

McHenry Savings Bank offers loans to fund your major purchases and make your dreams a reality. Are you ready to purchase a home, or refinance your existing mortgage? We can customize a financing plan to your specific needs using a variety of loan options including:
  • Fixed Rate Loans
  • Adjustable Rate Loans
  • Construction Loans
  • Jumbo Loans
  • Vacant Land Loans
Due to increased call volume, please call 815-385-3000 or email loans@mchenrysavings.com directly for assistance. We are working to respond to all of our clients as quickly as possible during this time.

No comments:

Post a Comment