Posted on: 17 April 2019
First-time homebuyers are likely to face more problems than those who want to buy their second or third home. At the same time, most of the problems that first-time buyers face are related to mortgage complications. Here are a few tips you can use to get an adequate mortgage at a reasonable rate for your first home.
Low Down Payments
As a first-time home buyer, you probably don't have a lot of money you can use to buy a home. Many first-timers buy starter homes because those are the properties they can afford. Unfortunately, mortgage providers want to see a good down payment because they have a vested interest in your potential home. The lender doesn't want to lose a lot of money if you ever default on your payments. Thus, a lender who wants to be attractive to first-time buyers will require relatively low down-payments.
Low Credit Score
Many first-time buyers also don't have great credit scores. Maybe you have been struggling financially for some time as you saved money for your dream house. Or maybe you had a few hiccups early in your career, and you haven't fully recovered financially. Regardless, look for a lender who accepts relatively low credit scores to boost your chances of mortgage qualification.
Alternative Credit Data
Many first-time home buyers don't have the traditional proof for credit histories and scores that most lenders want. Traditional credit scoring uses things like personal loans, credit card statements and auto loans. Alternative credit scoring considers things like rent payments, utility payments, asset ownership, and public records, among other things. Look for a lender who will make use of your alternative credit if you don't have traditional credit data.
Many first-time homebuyers don't understand the mortgage application or home purchase process as well as they should. Unfortunately, ignorance will complicate an already complicated process even more. Fortunately, lenders who want to attract first-timers recognize this fact and have staff members who will hold your hand throughout the process. Therefore, look for a lender with special assistance to first-timers like you.
As you can see, you don't have to suffer or abandon your dream of home ownership due to the complications you may face as a first timer. You should broaden your quest for mortgage beyond the traditional lenders. You need to approach the right lenders — like those who specialize in first-time home buyers — to own your dream home.Share