Best Finance Ideas

Buying your first home is a big, scary first step. There are a lot of things to consider, and a lot of things that could go wrong. Here are four tips to help you get the best mortgage possible for your new home. 

Improve your Credit Score 

Your credit score is a major thing that the lender will look at when you are trying to get a mortgage. A credit score of 620 is needed to get a mortgage. A credit score of 740 or higher will help you get the best rates. One way to help improve your score is to pay down any debts you may have. Also, dispute any errors that may be affecting your score. To keep your score at its optimal level avoid opening any new accounts such as a car, or credit card until your home loan closes. 

Do Your Research 

There are a lot of mortgage options available for homeowners. Conventional mortgages, the Federal Housing Administration, and Veterans Affairs are all types of mortgages that you could get. There are also state and federal programs that can help first time home buyers. 

Whatever programs you decide to use, never take up the first offer that falls on the table. Comparing the mortgage rates of at least three lenders can save you over 3,000 dollars. Like every other purchase, it saves you money to shop around and look for the best deal. To find lenders in your area search home loan purchases Boise id. 

Have Your Paperwork in Order 

Before you get a loan, you will need your W2’s for the last few years. You will also need a record of your income such as pay stubs, assets, investments, and bank statements. They will also want to know what money is coming out such as loans, credit cards, and alimony. It will help paint a picture to your lender on how responsible you will be at paying a loan, and what you can afford. 

After talking with a lender, you might be able to get a pre-approval letter. After the lender has combed through your finances, they might give you a letter that shows how much they will lend you. This letter will give you the upper hand when you go to buy a house. 

Create a Budget 

Start saving up early for a down payment. Programs such as the first time home buyer program allow for smaller down payments, but even a small percent can be a lot. For example, just 5 percent of a 200,000 dollar house is 10,000. The higher the percentage of the down payment paid, the more it could save you later on. 

Besides the down payment, you will also have to pay a closing cost. The closing cost is around 2 to 5 percent of the loan amount. Shop around to find the best home insurance and home inspection cost. You can sometimes negotiate with the seller to pay part of these costs. Remember that even after the house closes you will still need money to turn on electricity, water, and move your items into your new home.