So you’ve decided to make one the biggest decisions in your entire life by buying a home for the first time. I know that these times can be pretty stressful, which is understandable. But more importantly, it should be exciting for you and your loved ones while trying to find that place you can call your home. The personal learning curve on what to expect during this process can be pretty steep, to say the least, but you can save yourself a lot of time, and stress, just by doing a little bit of homework ahead of time.
Familiarize with Credit Score
You need to familiarize yourself with your credit score and the credit score of anyone else who will be on the mortgage loan. As most likely already know, your credit score is probably one of the most important factors qualifying you for a home loan. You want to make sure you’re within the credit limit before you start the process. Because if you fall short, we all know that repairing damaged credit can take a long time, and a lot of money during that time. So it’s wise for you to have that squared away from the get go.
The Financial Documents
You will also want to go over and collect documents that show what your households annual income is. They will probably ask for pay-stubs and tax returns going back at least two years. Going over these numbers will help familiarize yourself with exactly how much you could potentially qualify for. You may also want to do yourself a favor and keep all these documents together when you’re done, because the mortgage company will need them once the process has begun.
Types of Arizona Mortgage Loans
The types of mortgages available may be the next thing having your nerves on the verge of breaking. You should be aware there are different types of mortgages from the conventional fixed rate mortgage, to ARM’s and Jumbo loans. You conventional fixed rate loan is pretty basic. Your mortgage will end up being whatever the lowest possible fixed rate you qualified for, and it won’t change over time. Your ARMs on the other hand are a different story. With these, you will pay the lowest fixed rate for the first 3-10 years depending. The starting rates are usually lower than the conventional fixed rate loans, but they will go up over time. Then the Jumbo loan is a loan where what you might be looking at is over $415,000; with these you will pay the lowest possible price for a very high valued property.
The last thing you should worry about before starting this process, is figuring out your down payment. It can be difficult to come up with your down payment to start with, but don’t worry. There are programs available that can assist you in receiving a “loan” for your down payment. These assistance loans can go up to $10,000 and are interest and payment free, forgivable after five years. So think of them more as grants, as opposed to loans.
I hope this has been helpful to you and that some of your stress can be alleviated by digesting this information. So please, enjoy the hunt for your first time buying a home because it’s truly a special moment and good luck along the path to your new future.