The Steps to Getting Your First Mortgage
So you’re about to buy your first home. Congratulations! This is an exciting new chapter in your life. But if you have never owned a house before, mortgages and all that comes with it can seem very daunting. Here are the first steps you will need to take in the homebuying process.
Decide on How Much You Can Afford: This is an important first step so that you shop for homes in your price range right from the start. If you are having trouble budgeting on your own, a lender will be able to help you decide what kind of houses to look for.
Get Your Documents Together: Depending on your financial situation, such as current and past employment, credit score and debts, you may need to start preparing to buy a house months before you actually do. Now, of course, there are always people to help you out! But lenders are going to need documentation such as bank statements, paystubs and tax returns, so having these prepared ahead of time will make the whole process a little simpler.
Get Pre-Approval: Most first-time homebuyers will need to finance the house. This means choosing which mortgage is best for you. The most popular choices are a 15 or 30-year mortgage with about a 20% downpayment. However, every customer has a different situation, so your lender can work with you to find which would work best. Getting pre-approval means the lender has considered your financial past and current situation and decided how much you can borrow to purchase a home.
Get Your New Home Inspected: We recommend getting your new home inspected before you close on it. You want to make sure the house is a solid foundation for you to start your future in.
How to Close: Closing on a home, or going into escrow, is the process after you have decided on a specific home that is right for you. It is sort of like a “double checking” to make sure everything is in place. It also involves some legalities like title insurance and documentation preparation, so there are usually extra fees for closing. Make sure you talk to your lender before this step to know how much to expect!
After you close on your new home, it’s time for the adventure of actually moving in. We know that purchasing your first house can be a challenging feat, but your friends at LNB are here to help. Contact us now about our First Time Home Buyers Program, and learn how you can get up $5,000 to put towards the purchase of your new house!