The housing market has recently been favoring buyers lately.  This trend is bringing more and more first-time buyers to the closing table.  If you are considering buying your first home, preparation will be essential to your success.  There are a few things you can do to make sure you are ready to buy.  Following the right steps will help you secure a better rate and save money over the course of your loan.  Wyndham Capital Mortgage offers this quick primer for first-time home buyers.  

You cannot start preparing too early

It’s never too early to start building a healthy credit history.  Even if you’re many, many years away from your first home purchase you can still start laying the groundwork for your credit history.  Use credit cards sparingly and wisely from the beginning.  Don’t get in credit trouble while still in college.  Pay your bill on time and in full every month.  Set up a payment schedule for paying off your student loans as early as possible.  Put of major purchases like a new car or furniture until you have a significant down payment or can pay in cash.    It’s never too early to start building a solid foundation for your financial future.  

Create a budget

If you want to buy a home, you need to have a budget.  Creating a budget helps you allocate your dollars and see what you’re spending.  Once you’ve planned out a budget you have a much better idea of how much you can afford as a mortgage payment, where you can make cuts and how you can save up a down payment.  Stick to your budget.  Resist the temptation to overspend here and there.  Small expenditures add up quickly.  Each one can push your new home that much farther into the future.  

Save up a down payment

Having at least a 20% down payment saved and available for use at the time of purchase will save you money and give you a better position in negotiations.  A buyer with a larger down payment is viewed as a serious buyer and one carrying less inherent risk.  A 20% down payment will likely qualify for better rates and terms on your mortgage loan as well.  It also saves you the cost of private mortgage insurance, which most lenders require on loans with smaller down payments.  Use your budgeting skills to build a sizeable down payment.  

Be a smart borrower

Once you are ready to obtain a mortgage, be a smart borrower.  Do your homework.  You should never go into such an important process uneducated.  Read up on the various types of loans, learn about points and interest and investigate insurance and incidental fees.  You can also call a mortgage professional like the staff at Wyndham Capital Mortgage for more information on the loan application process.  The staff at Wyndham Capital Mortgage is always happy to help.  

Don’t overdo it

Part of being a smart borrower is understanding where your limits lie.  Don’t borrow beyond your means.  You may be tempted to look at homes just beyond your budget with the intention of negotiating down to a better price.  However, this tactic usually just ends up with the buyer falling in love with a house he cannot afford.  Once you find a home you love, it’s hard to go back and start over.  You compare every home to the one you cannot have.  Resist the urge to take a peek at what a little more can buy.  Stick to your price point and don’t overspend.  

Collect your paperwork

The staff at Wyndham Capital Mortgage can help you figure out what paperwork and documentation you will need for your applications.  Start collecting pay stubs at least 3 months in advance of a purchase or ask your employer if records are available online.   

It takes some work to become a homeowner.  Start early, stick to a budget and make sure you have all your documents ready.  Your home buying experience will be so much smoother with a little preparation.

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