subject: Tips On Securing Your First Mortgage [print this page] Owning that first home can sometimes seem like an impossible goal. There are often many obstacles between a person and achieving that goal that they may end up losing sight of it. Many first-time homebuyers experience the same difficulties and challenges, and have to find a way to overcome them like any other obstacle in life.
The requirements for securing a first mortgage are fairly straightforward. Those who are trying to secure their first mortgage will need to have full-time employment, or another form of stable income. Banks will require you to provide proof of that income to them. A first-time homebuyer will also need to have a verifiable down payment. There is more than one option for what can be used for a down payment. It can be anything from accumulated personal savings, a gift from family, registered retirement savings, proceeds from the sale of an existing home, or sweat equity. What is important is that you can provide enough money upfront to secure the loan.
A good credit rating is essential in obtaining your first mortgage. Based on your credit score, banks will decide whether or not to approve a loan for your mortgage. Credit scores will also affect how low or how high the interest rate will be. This is why it's necessary to plan ahead when deciding to buy a home, and to make smart financial choices along the way. Financial problems can arise very quickly, and often at no fault of your own. Still, you must be prepared to deal with them as they come, and know what to do if you end up in financial hardship. In some instances, it may be best to seek credit counseling to ensure that you are making the best financial decisions, so that your dream of owning a home doesnt end up being more difficult than it needs to be. You must learn about your credit score, what it means to banks and lenders, and how to elevate it now so that it won't hinder you in the future.
If you do have any outstanding loans or debts, it doesn't mean that you shouldn't be preparing for homeownership. Although most of your previous and current financial obligations should be taken care of prior to obtaining a mortgage, debt management is part of the same goal as buying your first home. Therefore, they should be treated as a common goal. It is beneficial to create a healthy dialogue between you and your bank, or any companies that you might owe money to. Maintaining an open and positive communication line is key to managing these obligations before they get out of your control.
A great deal of thought and preparation should go into buying your first home. You'll need to set goals to save a certain portion of your income each month, and be sure to be consistent and stick to it. Pretty soon this will become a part of your personal financial management, and accumulating personal savings will become a natural habit rather than a forced effort. At first these adjustments can seem difficult if you are already pushing your budget each month, but small changes can yield large results. By simply paying closer attention to spending and saving, it is amazing to see just how quickly your bank account can grow. Many people are surprised to see how their needs can be met, and they can still enjoy their free time, have fun, and spend more time with the family, all while actually saving money. All it takes is prioritizing between your needs and wants, while consciously adjusting your saving and spending habits.
