How To Solve Common New Homebuyer Challenges
Venturing into the housing market as a first time homebuyer can be a daunting process as there are many different steps that can be confusing. One of the most complicated steps you must go through when buying a house is acquiring a mortgage. There are several requirements when it comes to obtaining a suitable mortgage. If you do not meet them, your mortgage application may be declined, or worse, you may receive an expensive or unfavorable mortgage.
As a result, before applying for a mortgage, you need to pay attention to the requirements and the potential challenges posed by the application process. To help you with this, professional mortgage broker, Angela Milosevic has listed the essentials for a first time mortgage and has also explained how to solve common new homebuyer challenges in these areas.
1. Down payment
The biggest challenge for most first-time homebuyers is coming up with a down payment. Usually, mortgage lenders require a down payment of 5% of the purchase price of the house from a first-time homebuyer. In addition to the down payment, buyers also need to have enough savings to cover all the closing costs associated with a home purchase. For a first-time homebuyer to prepare for all of these expenses, they should consider meeting with a mortgage broker before applying for a mortgage. A broker can help them decide the amount of down payment to aim for and which loan options would be the best for them.
2. Credit score
Mortgage lenders rely on borrower credit scores to decide the loan amount and the interest rate they can offer them. But these credit scores can be a challenge for first-time homebuyers if they do not have an established credit history, which can result in a lower credit score. Buyers with lower credit scores may end up taking out a mortgage with a sub-prime lender who charges higher interest rates. But with the assistance of a mortgage broker, they can improve their credit score.
3. Employment history
Lenders care about the borrower’s job history and prefer lending to borrowers with the same employer for at least two years. This is important to lenders because they believe that borrowers who are employed at their current company for several years are less likely to lose their jobs and will most likely be able to make their mortgage payments. But, some lenders will overlook the short employment history if the borrower’s finances and credit history are strong enough to qualify for the mortgage loan.
For more tips on overcoming the challenges you may face as a first-time homebuyer, reach out to mortgage expert Angela Milosevic. With over a decade of experience in the mortgage industry, I can easily guide you through the mortgage process and find you the best financial products. I am also up-to-date on the latest changes in the mortgage industry and can offer you various mortgage options as I have a broad network of lenders. That said, I do not work for the lender. My commitment is to you and your personal needs.