First Time Homebuyer – Shopping For a Home Loan

Nov 2, 2012

Home Loan for first time home buyer

Home loans are the most confusing part of buying a home. Organization makes it easier.

Purchasing your first home can be a complex process, but keeping yourself organized is your key to success.

Before shopping for homes and figuring out which neighborhoods you like best, you’ll need to figure out what you can afford. You will also need to prepare all your financial documents to apply for a loan.

Can you afford it?
When purchasing a home, it’s important to remember that you won’t be paying just the home loan. A lot of communities today also have a Home Owner’s Association, also known as an HOA. If you pick a community that has one, then you’ll pay a monthly, quarterly, or yearly fee to the association for things like community pool maintenance or lawn care. This will differ depending on what home you choose.
As a new homeowner, you will also be paying property taxes and utilities. Your real estate agent can get you an estimate of both of these based on neighborhoods and size of the homes you are looking at.

Financial Information
When applying for a new home loan, most financial institutions require the same basic documents. If you are applying for a loan jointly with another person, then you will need all the following documentation for each applicant:

  • home loan2 (most recent) years of tax returns
  • 2 (most recent) pay stubs
  • 6 months of bank statements for checking and savings accounts
  • current statement for any open credit cards
  • current statement of any current debt (car loans, student loans, etc.)

You will likely have to fill out a loan application and sign an authorization for the institution to pull your credit score. The bank will analyze all of your documentation and provide you with an approval dollar amount. You can also use financial calculators (like this one, or this one) to give you an idea of what you’ll be able to afford.

Don’t forget to shop around for the best rates. Some banks give discounts on rates for having several products, signing up for auto-payments, etc. Make sure to ask questions and explore all your options.

Happy house hunting!!

Are you shopping for a home loan for the first time? Do you have any other tips for those who are buying their first home? Let us know in the comments.

Similar

The Best Trailers for Camping

The Best Trailers for Camping

Camping is a great way to spend time with your family or friends, but anyone who has been camping before knows you spend hours packing.  Sometimes you have to bring everything you will need for an entire week, depending on where you are camping and the proximity...

How to Modify or Cancel a Reservation

How to Modify or Cancel a Reservation

Life happens; it's inevitable. Sometimes events or our scheduled plans need to be canceled or rescheduled. Moving is one of life's bigger events, and sometimes, rearrangements have to be made and may cause a scheduled move to get canceled. So, if you're reading this,...

What to Put In Each Moving Box Size

What to Put In Each Moving Box Size

Putting items in the appropriate moving box is important when packing your belongings. Don't pull your back when carrying items in the wrong box! A larger box might have more space, but that does not mean you should put more things into it. Each size moving box is...

Moving with a 20′ U-Haul Truck

Moving with a 20′ U-Haul Truck

Do you have a 2-3-bedroom move coming up? Perhaps you have an expanding family, or you’re moving into a home with a couple of roommates. You’ll want to rent a 20’ truck for this size move. Whether you have a local or a one-way move, there are several reasons why this...

Archives