In all parts of the world there are first-time home buyers that don’t know how to start their home buying journey. if you are one of them, you have arrived to the right place. My name is Andres Urbina with Fiesta Real Estate a local Realtor here In Wichita, Kansas. I am licensed here in Kansas so the following tips are for my Fellow Kansans but may apply to the rest of the united states. Here in Wichita, Kansas we have several lenders, so feel free to shop around and get more 2-3 pre-approvals and see who has the best rates in town.
- Assess Your Debt: It’s crucial for home buyers to manage their existing debt effectively. Lenders look at the debt-to-income (DTI) ratio, and it’s generally recommended that the total monthly debt doesn’t exceed 36% of gross monthly income.
- Check Your Credit: A good credit score can secure a lower interest rate on a mortgage. Buyers should check their credit scores in advance, correct any errors, and take steps to improve it.
- Be Ready to Commit: Buying a home is a long-term commitment, often with mortgage loan terms of 15 or 30 years. Buyers should ensure they’re ready to commit to a home and city for at least 5 years.
- Don’t Skip Preapproval: Getting preapproved for a mortgage is essential before house hunting. It shows sellers that the buyer is serious and has the financial backing to purchase the home.
- Save for a Down Payment: Encourage saving for a down payment as it can impact the terms of the mortgage and the need for private mortgage insurance.
- Understand Needs vs. Wants: Buyers should have a clear distinction between what they need in a home and what they want, which can help them stay within budget.
- Stick to Your Budget: It’s easy to get carried away, but buyers should stick to their budget to avoid financial strain.
- Research and Plan: Buyers should get more than one pre-approval to see where they can get the best interest rate. buyers should also know what neighborhoods, schools they like the best.
Basically, the first step is to apply for a loan. when you get pre-approved the lender will give you approximate monthly payments, you will see if you are able to afford those payments. a pre-approval is not a commitment, so you can postponed the home purchasing process or move forward. if you don’t get pre-approved, the lender will give you the best advise as to what steps you need to do in order to increase your credit score and lower the debt-to-income ratio.