Looking to purchase your first home in the Baltimore, MD area? While such a large purchase can seem overwhelming at first, there are several steps you can take before buying your first house to ensure your experience is as positive as possible. In this article, we break down some Frequently Asked Questions first-time homebuyers often ask as well as some helpful tips to point you in the right direction when it comes time to take the mortgage plunge!
First Time Homebuyer FAQs
Are you excited by the prospect of owning your own home but daunted by the large price tag that comes with it? Not to worry—with the proper forethought, planning, and expert mortgage loan advice, this enormous undertaking can be one of the most rewarding steps you take in life. Here are some of the Frequently Asked Questions first-time homebuyers typically have:
1. What is the minimum credit score required to buy a house? If you’re looking for homes in the Baltimore area, it’s crucial that you have an understanding of your debt-to-income ratio (DTI), your available savings for a down payment, and your current credit. These factors all affect the terms of a mortgage loan, should you choose to participate in one—so what’s the minimum required credit score for a mortgage loan? Most mortgage loans accept credit scores of 620 or higher, though some accept “fair” credit scores in the 500s. If you are not going through a mortgage lender and are instead opting for a traditional mortgage, it’s generally good practice to keep your credit scores high and save as much as you can for a down payment before your purchase.
2. What’s better: a traditional mortgage or a mortgage loan? The answer to this question relies on what you have put away for a down payment, your current credit score, and your spending habits. For example, if you have enough money saved for a 3% down payment on your house, you may consider opting for a traditional mortgage—however, it’s important to note that these will not be insured or guaranteed by the government. Fortunately, there are many different kinds of mortgage loans that may streamline the process of buying a home while offering a guaranteed loan backed by the government. Speak with an expert mortgage lender today for more info!
3. How much mortgage can I afford? This seemingly straightforward question is based on more than just your income—it includes your existing debts and credit score, and the length at which you’ve been at your current job as well. Are you interested in taking out a mortgage loan to secure the house of your dreams? See if you can get pre-approved for a loan before you even get started house hunting so you can plan your budget accordingly.
First Time Baltimore Homebuyer Tips
Still have some questions about the homebuying process? Here are some of the top tips Baltimore homebuyers can employ to keep on the right side of their mortgage loan and select the right house for their circumstances!
1. Boost your credit score. Big purchases like houses and cars are what your credit score is all about! Before going into the house buying process, it’s best to take measures to boost your credit score, such as paying off debts and reducing the amount you put on your credit card. Limit hard inquiries to your credit for houses that you’re really interested in, to keep your score up!
2. Put all the money away that you can. This not only helps when it comes time to make a down payment, but also can help new homebuyers cover the cost of closing as well. The more money you can tuck away for each of these fees, the stronger your offer will be.
3. Look for new homeowner assistance. You may be surprised at the availability of loan options in statewide homeowner assistance programs! Check out the Maryland Mortgage Program for available lending options, a free online mortgage calculator, and more.
Baltimore, MD First Time Homebuyers
As you can see, there’s a lot to consider when it comes time to buy a house. This enormous purchase doesn’t have to take over your finances, if you play your cards right! Join the ranks of happy homeowners and put in the planning before buying a house to ensure you’re on the right track.
Want to speak to a local mortgage expert? Contact MCS Mortgage Services today!