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Expert Tips on How to Find an Affordable Loan for First-Time Home Buyers

Purchasing a home is likely the most important financial decision you’ll make in your lifetime. To become a homeowner, one of the first things you’ll need to do is to get a mortgage that will help you finance the transaction.

In this page, we’ll give you several helpful tips to keep in mind that will help you find an affordable mortgage that’s right for your budget.

You’re not required to make a 20% down payment

One of the most common myths in home buying is that a buyer is required to make a down payment of 20%. While putting down a 20% down payment will usually give you a lower interest rate, this is by no means a requirement for mortgage financing.

The Federal Home Loan Mortgage Corporation, better known as “Freddie Mac,” provides a secondary market, which gives buyers more options. Its programs are designed to help first-time home buyers and low income borrowers qualify for loans, offering down payments as low as 3%.

Look for a program that can help you with your down payment

Many cities and states offer down payment assistance programs to help home buyers with financing. You can check this website to get information on programs you might be able to qualify for.

Keep in mind however, that your mortgage lender might not participate in the down payment assistance program you find, so be sure to inquire regarding approved lenders beforehand.

Remember to take caution, as your mortgage application could affect your
credit score negatively

Your credit score could be affected negatively if your credit report is pulled too many times.

To avoid this, you can actually pull your own credit report for free, and provide it to lenders yourself to get rate quotes.

As soon as you’re ready to apply for a loan, your mortgage lender will have to pull your credit report, but you can keep it from being pulled repeatedly (and avoid paying lenders’ credit check fees as well) by pulling your official score on your own.

Shop around and get more information on lender fees

Different lenders charge different fees, so it can help if you shop around, as you’ll also cover most of the fees associated with your home purchase.

You can compare loans by checking their annual percentage rates or APR, which contain the various lender fees.

Closing quickly could help you get a lower interest rate

The duration needed to process mortgage applications has been reduced over the years due to the easy access lenders have to a large amount of online data. The shorter processing time could help you save more money.

As soon as you get a rate lock from your mortgage lender, take a look at the length of time it will take them to commit a rate to a borrower. The longer it takes compared to the estimated time it’s likely to close means a higher cost.

In short, closing quickly can increase your chances of scoring a lower interest rate.

Searching for the finest Merced County real estate options? Get in touch with us at Soldavi Realty today by calling 209.383.3000 or send an email to a(dotted)diaz(at)soldavi(dotted)com.

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