When you are buying your first home, there are certain things that you will need your mortgage lender to offer. First time buyers often need more assistance than those who are already on the property ladder. The following tips can help you find a mortgage lender that will be able to meet all your needs as a first time buyer.
1. Review Your Credit History And Score
Your credit score and history are really important pieces of information that St. Louis mortgage lenders will use in assessing your application. It is a good idea to review these before you make your application so that you can see what the lender will see when they are looking at your application.
One of the most important things to check is your debt-to-income ratio. This will play a large part in determining how much lenders are prepared to let you borrow. Just because you could be offered a certain figure, this doesn’t mean that it would be affordable and so this is something to think about.
If your credit score is lower than you would like, then there are things you can do to improve it, so don’t panic too much.
2. Ask About Programs For First Time Buyers
Some lenders will work with state agencies to offer programs that can help first time buyers. You may be offered a discount on the rate or assistance with the down payment. They may be available to you if you are a veteran or public servant, or if you have student loans.
The programs are often marketed by state agencies for housing and finance, but this doesn’t mean that you won’t be able to use the services of St. Louis mortgage companies. Many of these loans are actually managed by just this type of company.
3. Choose A Lender That Offers Government Backed Home Loans
You may also find that you qualify for a program that is offered by the government. Depending on your circumstances you could receive a loan from the Department of Veteran Affairs, the Federal Housing Administration or the Department of Agriculture. The requirements to qualify for one of these loans are often relaxed, so it is more likely that you will be accepted.
VA and USDA loans often do not require you to make a down payment. You will have to make a 3.5% deposit with a FHA loan, but this is lower than you would get with other lenders. All three of these loans will also have a lower minimum credit score that is needed to be accepted. The downside is that the total amount you can borrow also tends to be less than other lenders. Your monthly payment is also likely to include mortgage insurance and this can make it higher.
4. Compare Interest Rates And Other Financial Details
There are many rate comparison tools that you can use to see what rates different St. Louis mortgage companies are offering. While looking at APR can be a useful basis for comparison, it is not all that you need to think about.
Most mortgages will come with fees for various aspects of the application, and these should also be compared. These can vary quite considerably between lenders and so you should always ask for a full list of all their costs. If they try to explain it to you verbally, then you can always ask for the information in writing. This is often the best option because it ensures that nothing is forgotten about.
If you feel as a lender is trying to push you into a decision, then this should be a warning sign. You need to be given enough time and space to think everything through, and a good lender will respect this.
5. Get Pre-approved Before You Start Looking For Houses
Lenders will often give you pre-approval which means they will give you a figure that they will be prepared to lend you. It is a good idea to have this in place before you start looking for a property so that you know what your budget is. You will also get some idea of what your mortgage repayments will be.
You may be able to get pre-approval from lenders without having to visit their office as they will allow you to upload digital documents. However, others will want to meet you face to face. When you are choosing a lender you may want to take into account whether their criteria for pre-approval will work with your schedule.
If you have a low credit score, or your income is inconsistent, then this could be a barrier to you getting pre-approval. Many lenders can work around this though, so it is always worth asking if there is anything they can do to help.