Wondering how to create a winning first-time home buyer loan application? We’ve got your back! Creating a strong application requires preparation and diligence, but with a little bit of effort, it can be done! Follow these tips to improve your chances of qualifying and make the home-buying process smooth sailing.
Tips for Submitting a Strong First-Time Home Buyer Application
Applying for your first mortgage can seem daunting at first, but once you go through the process, you’ll see that it’s not all that bad. What’s more, being prepared and filling out your application accurately can help your chances enormously and minimize your stress.
During this process, your lender will review essential financial details like your income, assets, debts, credit history, etc. This is done to assess your ability to qualify for and repay the loan.
While first-time home buyer application requirements vary from one lender to the next, there are some best practices you can follow. Here are some tips for getting started:
Check Your Credit Report
Lenders will evaluate your credit history carefully. You may want to take the time to review your credit report and look carefully for errors. Also, make sure your accounts are in good standing and pay down any large credit card balances. This can boost your score. Give yourself plenty of time to improve your credit and get it where you want to be before applying.
Save for Your Down Payment
Having adequate funds for your down payment and closing costs is key. According to a recent report, the average downpayment among first-time home buyers in 2023 was 8%. That being said, you should aim to save about 20% of the purchase price if possible, to avoid the cost of PMI.
If this isn’t possible, don’t worry, there are other options! You may just need to think outside of the box or choose a different loan program. Can you obtain gift money from a parent or close relative? Are there grants available that can help you cover the costs? Additionally, many lenders also offer programs like FHA loans that only require 3.5% down, which can be great for first-time home buyers.
Provide Proof of Your Income
Be prepared to provide recent pay stubs, W-2s, and tax returns to verify your income. Have co-borrowers submit documentation as well. Also, if applicable, be prepared to explain any gaps or irregularities regarding your employment.
Avoid Taking on New Debt
Avoid applying for personal loans and new credit cards. Too many new accounts can negatively impact your credit score and hurt your application. Therefore, it may be best to wait until after closing.
Ask Questions Upfront
Being proactive and asking your mortgage lender questions ahead of time can help you avoid unpleasant surprises. Make sure you clearly understand the qualification requirements, timeline, and documents needed for your application. If you have questions, don’t be afraid to ask!
We’re Here to Guide You Through the Process
The home-buying process can feel intimidating. But with the right lender guiding you, it doesn’t have to be! Our experts at Mortgage Solutions Financial are here to help with your first-time home buyer application. Let’s get started today!
