Shopping around for a mortgage for your first home is way different than shopping for other assets. This is a life-changing decision, one you may have to live with for life. One has to be very thorough in their search and in keeping all the pointers in one place. Our ultimate checklist is for first-time home buyers so they can focus on their dream house without stressing about lists.
Plan Ahead
Be prepared to spend some time into this long-drawn process with a solid plan in place. A mortgage won't fall into your lap and there may be a time gap between when you want to move and when you actually move. Finances should be your first order of business as homes don't come cheap, so start saving for that big, fat down payment. The more organized your finances are, the easier it is for you. Ensure you have a credit score which is attractive to lenders. A minimum credit score of 680 is what most lenders insist upon. Also, calculate how much budget you would be able to allocate towards paying your mortgage.
Think Long Term!
Mortgage planning is anything but easy. You need to think ahead in time to be able to pay your mortgages on time and have a stress-free life. Think it through especially if you are a bachelor and plan to marry in the near future; or, if you are married and want to have kids a few years down the line. The expenses go up with such life-events and it may impact your ability to pay your mortgage debt. However, this may not be an issue if you have a long-term plan in place already. You would also need to think ahead in terms of location. Would you like to live in a city or farther away from a city? How will this impact your commute to work (unless working remotely) or the activities of your spouse and kids? Travel to and fro rural areas can be expensive.
Set The Plan In Motion
Past the planning stage you need to start meeting lenders. Before meeting them you'd need copies of your bank work, ID proof, income proof, employment proof etc. It is best to keep multiple copies handy. Meet as many lenders as you can and create a list of your top preferred ones to go back to before zeroing in on one.
Then, ask your lender to help you get a pre-approved mortgage. This is done so you can make offers on those houses which you can afford to buy. The pre-approved mortgage also helps in setting a budget which is quite accurate. This would include the down payments and other costs such as home inspection fee, legal fee, insurance, as well as moving costs.
Once you have cleared all the above from your checklist you can move forward to the next stage of finding a house. Make your moves towards your new house by being well-informed and fully prepared. If you need any clarifications we are happy to help!