A few tips for first-time homebuyers
No. 1: Get prequalified. Sellers typically won't accept your offer unless it's all cash or you have a lender's letter saying you can get the financing you need to close the deal. Consequently, being prequalified for a loan is crucial, says Matt Phipps, a Realtor at Phipps Real Estate in Warwick, R.I.
"You don't want to lose the house of your dreams because you weren't prequalified for the mortgage," Phipps says.
No. 2: Shop around. The first and best way to ensure you secure a low mortgage rate is to contact several different lenders on the same day to see which is offering the best mortgage rate. Mortgage rates fluctuate daily and always rise faster than they fall.
To start, you'll need to contact one lender to get your credit score. Craig March, a personal mortgage consultant with Inlanta Mortgage in Janesville, Wisc., says you should share your credit score with other lenders rather than letting each one you contact pull your credit because having too many inquiries could lower your score.
No. 3: Target your territory. Every town has pros and cons, but casting too wide a net can make you crazy, Phipps says. Decide where you want to live and focus on that area.
"Do some drive-bys and make sure you like the setting of the house before seeing the property," he suggests.
No. 4: Prioritize your preferences. Make a list of what's important to you and your family, whether it is location, condition, price or certain amenities, and be prepared to make sacrifices.
"You're not going to find the absolutely most perfect house," Phipps say. "If you get eight of 10 things you've prioritized, you've done very well."