While entering the homebuying and mortgage market for the first time may feel somewhat intimidating to some people, the reality is that you’re in a much better position here than your parents would have been a decade ago when it comes to information and resources. Due primarily to the internet and our connected society, including resources like this blog, homebuyers have numerous robust resources at their disposal to help them navigate the mortgage and home purchase process.
At Altius Mortgage and our partners at Mortgage Ogden, we’re here to help with not only numerous loan programs geared specifically to first-time homebuyers in Ogden and other parts of Utah, but also important information and resources to help you move through this process – including the ability to work with our great loan officers to receive financing. Our officers will inform you on numerous areas of this process, including helping you steer clear of a few of the mistakes first-timers often make in several different realms as they enter the mortgage and homebuying world. This multi-part blog series will go over several of the most common errors and how you can avoid them.
Lack of Purchasing Power Understanding
First and foremost, you have to have an understanding of the purchasing power at your disposal before you move any further. That is, how much home can you realistically afford, based on both the down payment required and the expected monthly payments – and how these compare to your household income.
This is a great example of an area where modern resources make things simple. While your parents might have had to do this math by hand, today there are numerous quality mortgage calculators online, including on our Altius Mortgage site. These will allow you to plug in basic numbers for your income and expenses, then get a broad idea of what you can afford.
Avoiding Credit Areas
Credit is vital for any mortgage application, and it’s a simple reality that you will have to scrutinize yours a bit during this process. Especially if your credit is subpar, but even if it’s not, you should plan to take the time to look up your credit score and request a copy of your credit report from bureaus so you can check it for errors.
Single Rate Quote
Just like any other area where you have numerous options, you should be comparing the available rates that are out there. Don’t simply take the first rate you’re offered – check if you might be able to get a better number by applying with multiple lenders.
Small Down Payment
Down payment is a curious area within the mortgage world. On the one hand, it’s a complete myth that you must have 20% of the purchase price for a down payment no matter what – there are numerous programs that allow for much smaller down payment amounts, as low as zero down or 3.5% down in other cases.
However, lower thresholds don’t mean the down payment isn’t important. Putting too little money down will mean your remaining principal balance and interest payments are high, and this will put some buyers in a position they can’t afford. In some cases, it might be prudent to wait six months or a year to add to your down payment savings before you enter the market.
For more on first-time homebuyer mistakes to avoid, or to learn about any of our mortgage loan programs or mortgage rates in Ogden and other parts of Utah, speak to the staff at Altius Mortgage today.