Buying your first home is one of the biggest steps in your life and is a guaranteed way to build generational wealth and a more stable future. However, the process can get a bit complicated especially if you’re new to the ins and outs of mortgages.
No matter what you’ve heard about the current state of the housing market, buying a home is an attainable goal with the right savings plan, strategy, and timeline. Interest rates always fluctuate and you need to be prepared to make a move when it’s your time to hit the market. Here’s what first-time homebuyers need to know about mortgages:
Pick the Right Mortgage Group
The first step toward getting a manageable mortgage and interest rate is picking the right mortgage group. Instead of picking a cookie-cutter mortgage, go for an experienced team build on integrity, reputation, and commitment.
Allied Mortgage Group is a great option because they’ve been credited as financial experts since 1993. Although there are bigger mortgage companies out there, Allied Mortgage Group treats every client like their biggest and provides Veteran employees to guide you through the mortgage process.
Get Preapproved for a Mortgage
Once you decide on a lender, you’ll need to get pre-approved for a mortgage. The preapproval process helps determine your budget for the home because the lender sends you an official document stating how much they’ll loan you.
Be sure you’re serious about buying a home before getting preapproved because most preapprovals expire after 90 days. During the preapproval process, be sure not to take out any new lines of credit or run up credit card bills that you cannot pay off.
Understand the Down Payment
The average price of a home in the U.S, in the first quarter of 2022 is $428,700 which is a 30% increase from 2020 when the median home price was $329,000.
Because of these skyrocketing prices and a national global inflation rate of 8.3% in 2022, many potential homebuyers are finding it difficult to save for a down payment for a home. That’s why it’s crucial to understand down payment assistance programs that help you along the way.
For example, many first-time homebuyers receive grants through programs like the HomePath Ready Buyer program, National Homebuyers Fund, and Chase Homebuyers grant. For many of these grants, you’ll get 3%-5% off of your home’s purchase price to go toward closing costs. Plus, some lenders require as little as 3% down to purchase a home.
Happy home shopping!