How To Get Approved For Your First Time Home Buyer Mortgage

A home is the most significant purchase you will ever make in your lifetime, which means when it’s time for you to buy, you will need the help of a first-time mortgage. As the U.S. economy continues to grow after the recession that took place almost a decade ago, many people are looking to become first-time homeowners. The increase in those who wish to become homeowners has resulted in increased competition within the real estate industry. What this means is that now, more than ever, it’s important to take the necessary steps to ensure you get approved for your first-time mortgage. We’ve compiled a list of six tips to help you get qualified for your first home loan. Let’s get started.

What You Need To Know To Before Applying For A First Time Mortgage

Before you start a mortgage application, you’ll need to know the following:home key in the door lock

  • Your monthly income
  • The total amount of your other monthly financial expenses (auto loan payments, student loans, credit card minimum payments, etc.).
  • Your credit score
  • Any credit issues you have had over the past three to five years
  • How much money you can allocate for a down payment
  • How much house you can afford (covered in step two below)

6 Tips To Improve Your Chances Of Being Approved For Your First Home Loan

  1. Calculate Your Income & Monthly Debt Obligations The first step of your home buying journey is to determine and document your monthly income and debt payments. Having a thorough list of your monthly debt obligations will help you decide how much home you can afford.
  2. Check In With Your Credit Score Before you apply for your first mortgage, you will want to know the health of your credit. To do this, you will want to obtain both your credit score and your credit history report.
    • Credit Report: You’re entitled to one free report from each of the three major credit reporting agencies each year. Request your report from one or more of the agencies, and check to make sure there are no errors on your report or critical items like late payments or instances of collections. If you find a mistake on your credit report, take the necessary steps to get it removed before you apply for your first home loan.
    • Credit Score: Experts recommend that your credit score should be at least 680 to qualify for a first time home loan; however, every situation is unique, and there are picture of a home's kitchen. Wood floors, decorative table, and fancy layout.instances where you may be approved for a home loan with a score below 680. If your credit score is below 680, consider taking steps to improve it before you apply for a home loan.
  3. Don’t Open New Accounts If you are serious about becoming a first-time homebuyer, do not apply for new credit during the months leading up to when you plan to apply for your first mortgage. Applying for additional financing will reduce your length of credit history, and can also increase your debt-to-income ratio if you spend on those credit lines. Understanding what elements make up your credit score is vital to ensuring your credit is in top shape when you apply for a mortgage.
  4. Know How Much You Can Afford One of the essential steps in getting approved for your first time home buyer loan is to determine how much home you can afford. Keep in mind that your monthly mortgage payment will only be a portion of the total expense. As a first time homeowner, you will also be responsible for paying property taxes, homeowners insurance, and repair and maintenance costs.Some experts advise that your total housing payment, (including fees, taxes, and insurance), should not be more than 35% of your gross pre-tax income.  Many experts are much more conservative and suggest you budget less than 25% of your gross income for housing payments. It’s important to factor in your other monthly financial obligations to come up with a number that works for you. Launch FCU’s mortgage calculator is an excellent tool to help you determine how much home you can afford. Our friendly home loan specialists are also available to help you identify a payment and term that will work for your unique situation.
  5. Figure Out How Much You Can Put Down (Mortgage Down Payment) After you have determined how much home you can afford, it’s time to figure out how much you can save for a down payment. Launch FCU offers mortgages for as little as 3% down, which means you don’t have to have 20% saved up before you can apply for a mortgage. We believe in making homeownership affordable for everyone. Our low mortgage rates, along with our flexible terms and affordable monthly payments make Launch FCU the perfect lender for the first time homebuyer.
  6. Use The HomeAdvantage® Home Buying Center Launch FCU’s HomeAdvantage Home Buying Center is a free Launch FCU Member benefit that helps first-time homebuyers just like you simplify their home buying process from start to finish. You can use the HomeAdvantage Home Buying Center to:

It’s free and easy to enroll in the HomeAdvantage program. Sign up today to take advantage of all the tools the HomeAdvantage Home Buying Center offers to make your first time home buying journey easy and stress-free.

Final Thoughts

Becoming a first-time homeowner does not need to be cause for anxiety. Following the steps we provided in this article will make your home buying journey easy, fast, and convenient. Above all, it’s important to find a trusted mortgage loan company to finance your first home loan. Launch FCU strives to be that partner for you. We’ll be there every step of the way, making sure you understand your mortgage fully. Launch FCU will never sell your mortgage, and we will continue to provide you with personal, face-to-face service even after you close. Apply online today for your home loan, or call a friendly Launch FCU Home Loan Specialist at 321-456-5439.

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