Tuesday, May 31, 2016

7 Best Practices for First-Time Home Buyers

For most first-time home buyers, purchasing a home with cash isn't an option. Therefore, you're going to need to secure a mortgage loan. In order to make that process smooth and simple, the best mortgage lender at the Lake of the Ozarks has put together a list of best practices for you to keep in mind:

1. Pay Off as Much Debt as You Can.

By paying off as much debt as you can before applying for a mortgage, you'll be able to keep your debt-to-income ratio low. Lenders will look at your income in comparison to everything you owe, like student loans, car payments, credit card debt, etc, to determine how much you can afford to borrow.  

2. Develop Good Credit Habits.  

Your credit score is a huge determining factor when it comes to getting a great mortgage loan at the Lake of the Ozarks. Missing payments on student loans or habitually paying your bills late will negatively affect your credit score. In turn, that can make securing a home loan more expensive or even impossible.

3. Consider Consolidating or Refinancing Student Loans. 

Sometimes paying off your debt, such as student loans, is nearly impossible to do before you're ready to purchase your first home. If you can't pay them off, look into getting the payment lowered. You'll have to make the decision on whether or not spreading out your loan payments over a longer period of time is worth it to get a home sooner.

4. Keep a Solid Work History. 

Your work history is a good indicator of how your income will be. If you can't hold a job for more than a few months, a lender is going to have a difficult time loaning you money. Your Lake of the Ozarks mortgage lender needs to know that you are going to continue to have a large enough income to cover the monthly mortgage payments. While you can't change the past, make sure to keep your current job until after you have closed on your new home.

5. Document Everything. 

Throughout the mortgage process, you're going to be required to document everything. Get in the habit now of keeping track of tax returns, bank statements, brokerage statements and any other documents that verify the source of all your money. You'll also be required to verify your employment and income, once at the beginning of the process and again just before the closing. 

6. Don't Apply For New Credit. 

One of the worst things you can do to jeopardize your mortgage approval is to apply for new credit. It can be tempting to purchase new furniture for your new home on your credit card. Or maybe you think you'll have enough cash left over for a down payment on a new car. Once the mortgage process is underway, refrain from financing any new purchases until after your mortgage is complete.

7. Save Cash for Upfront Costs. 

While you're getting a loan for the cost of the house itself, you're going to need some cash to cover other expenses that come with purchasing a home. In addition to your closing costs, you're going to need to pay for a home inspection, an appraisal, a survey and city, county or state transfer taxes. Most lenders will also ask for at least a year's worth of homeowners insurance and property taxes upfront.

As a first-time home buyer, you probably have a lot of questions and I'm here to help! When it comes to your Lake of the Ozarks home financing needs, I'm committed to working with you every step of the way. I'll discuss financing options, offer competitive interest rates and back it up with the first class service you deserve.

For Lake area news, resources and tips on financial services, please 

Michael Lasson
Sr. Residential Mortgage Lender
NMLS #: 493712

2265 Bagnell Dam Blvd, Suite B
PO Box 1449
Lake Ozark, MO 65049

Direct:  (573) 746-7211

Email:  mlasson@fsbfinancial.com

**The postings on this site are my own and do not necessarily represent First State Bank of St Charles’s positions, strategies, or opinions.

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