How to Buy a Home for the First Time
Becoming a first-time homebuyer in New Jersey or New York can seem like a daunting task. So many things to consider, so many moving parts. But when approached methodically, it can be easily achieved.
Here are some pointers to keep in mind when purchasing your first home:
1. Talk to a professional
Finding your dream home and then discovering you can’t afford it can be heartbreaking. Touring homes beneath your budget can be a waste of time. To avoid both scenarios, before house hunting, speak to a respected residential mortgage banker like Ark Mortgage.
Your Home Mortgage advisor can help you determine your maximum affordable payment (MAP), based on current income, debt and assets. This is vital because unless you determine a viable budget in advance, you won’t be able to accurately pinpoint your appropriate home price bracket. Be sure to use Ark’s mortgage calculator to assist in this process.
If you don’t currently have a job with verifiable income, take the time to change this. A residential mortgage lender will require at least two years of verifiable income to approve your home loan.
If you are self-employed and/or have multiple streams of income, some lenders might balk because they aren’t accustomed to dealing with this type of borrower. That’s another excellent reason to turn to Ark Mortgage. We’ve specialized in this helping self-employed borrowers since 1983.
2. Build your credit
Your residential mortgage banker will explain how to create a credit history if you don’t already have one. One tip is to have a friend or family member add you to their approved list of cardholders. Their credit history will be added to yours.
If you currently have late or delinquent debt (student loans, car loans, credit card payments, etc.), pay them off or bring them current to make your credit as solid as it can be. Credit scores of 760 or above receive the lowest interest rates when applying for a mortgage.
3. Save your money
Start saving or gathering for your down payment. Even an FHA loan requires at least 3.5% down payment. This can be gifted by immediate family members so if your savings are low, it may be time to start making those requests. If you have undeposited cash, deposit it in a bank and allow it to “season” so it can be accurately “sourced.” Required seasoning times vary, ask Ark about the conditions of your prospective loan program.
4. Find the home you want
After your MAP and budget are determined and your credit is in order, it’s time to determine the location of your first home. You’ll want to find a location where you can get the most for your money. Things to start researching:
Most desirable location within a particular neighborhood (distance to transportation, house of worship, schools, shopping), home size (number of bedrooms, baths, square footage, acreage), home style (would you prefer one story, two stories, etc.) and amenities (finished basement? Attic? Eat-in-kitchen? Fenced-in yard?)
One thing in your favor as a first-time homebuyer in New Jersey or New York is that you have nothing to sell in order to buy, and you also don’t have to coordinate your sell date with the closing date of your next home. This may be the only time this will be true so enjoy the flexibility!
5. Get in touch with Ark
Contact Ark Mortgage to get the ball rolling and before you know it, you can be a first-time home owner and start reaping the rewards.
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