Six Steps For a New Home Mortgage Loan Purchase

Buying your first home and acquiring a home mortgage purchase can seem like a daunting task. The best way to approach getting a loan and finding a home is to take it one step at a time. Here are seven steps that will help you purchase your first home.

1) What Can You Afford

Determining what you can afford in the housing market is one of the most important steps as it helps define your search for a home loan and lets you find a comfortable mortgage amount that will allow you to find the home of your dreams without any undue burden. Some of the considerations to take into account include your household monthly income, your current level of debt (monthly bills, car payments, credit cards, etc.), your credit score, and the amount you will put down initially. Once you have a basic understanding of what the household earns minus what the household spends, it is much easier to determine a comfortable monthly mortgage loan purchase amount.

2) Get Pre-qualified for a Home Loan

If you are really serious about buying a home, it is very important to at least be pre-qualified for a loan. Getting pre-qualified means a cursory examination from a mortgage broker or financial institution who can verify your level of income, credit score and current debt and can quickly tell you much you can afford to borrow.

3) Do One Better: Get Pre-approved

Getting pre-approved for a home loan tells the home seller and your realtor that you are ready to make the commitment.

4) The Fun Part: Searching for your new home

With the advent of the internet, there are loads of ways for you to search for your new home. One of the easiest is to find a realtor website that allows you to search the mls listings. You can enter your minimum amount and maximum amount and the areas you would like to search and, viola, you will be given a list of homes for sale that meet your requirements

5) Lock up that interest rate and find the right loan

Your mortgage broker or lender can lock in an interest rate for 30 days or 60 days until your home closes and you move in, insuring that you know exactly how much your mortgage will set be once you move in..

There are two main types of home loans — fixed rate and adjustable. Fixed-rate loans divide the amount to be repaid over a set number of years. “Fixed rate” means that no matter how the interest rate fluctuates over the years, the amount of payment will remain the same. If the interest rate dips, your mortgage consultant will help you refinance to take advantage of the lower rate.

6) Closing and moving in

You or your realtor should have a checklist of items that have to be accomplished during the 30, 60 or 90 day escrow period. Home inspection, termite inspection, title on the property, your final approval from the lending institution, etc.

If all of this goes smoothly, you will own your home and can now look forward to the fun task of moving all of your worldly possessions into your new home! Do your homework, take it one step at a time and enjoy the process!