Tips for First Time Home Buyers

Tips for First Time Home Buyers after the Mortgage Collapse
After the big mortgage collapse a couple months back individuals applying for a home loan for the first time or people with less than perfect credit will find that it is not so easy to be approved any more. In fact, getting approved for a home loan just became a lot stricter because banks and lenders are more cautious than ever after the big fall out. So, what are some tips for first time homebuyers or individuals with less than perfect credit to help them with approval? You will find some great suggestions below.

Don’t Charge

The first thing you should do is make sure you hide all of your credit cards and stop charging! The last thing you want to do is to be charging on your credit cards when you apply for a home loan application. So make sure you only buy what you can afford and do not use your credit card. This will show the loan officer that you are responsible with your credit and will help significantly with your loan application.

Improve Your Credit

Another tip is to start working on your credit score. No matter what your credit score is you likely have some room to improve it. There are very few people that have a credit score so high they do not need to work on improving it. A couple of ways you can start improving your credit include paying off high balances, not charging on your credit cards, not applying for additional credit, and more. If you are lowering your overall debt and not accumulating more then this will show lenders that you are prepared for a home loan. Keep in mind that it will take time to reduce your dent and it will take time for your credit score to improve. But if you focus on it you will have no problem taking your credit score up a few points or a few hundred.

Save for a Down payment

Another great suggestion is to save for a down payment. Many home loans are available with no to little money down. If you have a large sum of money, at least $10,000 that you can invest in your home then that will increase the odds that you will be approved for a home loan. Coming up with a large sum of money may seem difficult, but if you are able to save an extra $400 a month then in two years you will have what you need. That is not that big of a sacrifice if you realize you will be getting your own home!

These are just a few suggestions to help first time homeowners receive approval for their home loan. If you begin now and work on your credit then you will be able to receive a home loan to buy the home of your dreams. It may be a little more difficult now than it was in days past but that is just the way it is. Start putting these tips into practice and in no time at all you will be able to buy your own home!

Posted in Finance.

By dashez – September 24, 2009