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    Mortgage Tips for First Time Home Buyers

    Buying your first homeDeciding to buy your first home is one of life’s biggest decisions! It is exciting, confusing, nerve-racking and fun all at the same time. We here at BN Realty have helped a countless number of first time buyers through each and every step of the buying process and we want to try to help you thoroughly understand the most important part of buying a home – the mortgage.

    So what should I do first when I decide to buy a home? Get a good overall picture of your finances and credit! You will need to know what you can afford before you start attending open houses and setting up showings. Your realtor and lender will help you with this, but it’s good to have an idea before you even start your search. You should be able to answer the following questions:

    • How much do I have available for a down payment? How much is required?
    • What are my financing options? (Conventional, FHA, USDA, etc.)
    • How much can I afford to pay per month?
    • Will I choose to escrow my taxes and insurance in my loan?
    • What are the average interest rates on a 15 or 30 year mortgage in my area?

    This last question will depend on a few things, most importantly your credit score. There are several ways to find out what your score is ahead of time and your mortgage officer will also be pulling your credit score before you’re pre-approved for a loan. The higher your score, the more likely you will be approved for a loan at a competitive rate.

    Once you have your finances you can talk to your loan officer about specifics. There will be many essential documents needed for the bank to keep on file. These include: pay stubs, W-2s, tax returns, proof of your expenses and statements for your assets. As a first time home buyer, you may qualify for special programs or grants – check with your bank! Buyers also need to make sure they ask their loan officer how much will closing costs be. It’s important not to overlook these fees and to make sure you have the money available by your closing date.

    Don’t forget to shop around with different lenders until you find the one that offers the best rates or incentives. Remember, this is major purchase and just one percentage point on your interest rate can lead to a huge difference in the amount you will eventually pay. We work with several lenders in town and would be more than happy to discuss options with you or connect you to a great resource.

    Now that you’ve sat down with a lender and have gotten your pre-approval, the fun can start! Searching for your perfect home should come only after you follow all of the above steps. Please don’t hesitate to call BN Realty at (309) 319-6030 for all of your home buying needs – no matter what part of the process you are currently in. We’re excited to help walk you through the process and we promise to take the time to answer every question that you have.

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