Before home shopping, you should first talk with a local lender that can go over all the different loan programs, there are FHA, CONV and VA loan options. They all have different down payments and you can see what suits your situation best. You will see if there is anything on your credit that needs attention and chat about if you qualify for any down payment assistance programs. If you are a first time home owner keep in mind that owning may be the same amount as renting or even a bit higher in some cases, but you will be able to write off the property taxes and interest you pay. You will have more tax benefits as a homeowner.
It’s important to understand the difference between “pre-approval” and “pre-qualification” as well. These tips will help you along with the home buying process. It’s best to get this done before you start looking for a home so that you know how much money you will need for a down payment and be sure that you are comfortable with your monthly mortgage.
Pre-qualification is the first step you take and this will give you ballpark idea of how much a bank will loan you so that you can shop within your price range. Most banks and credit unions will do this over the phone, and you give them your scenario and your credit history will usually not be checked. A loan officer asks you about your debt to income ratios, assets, and projected down payment and then calculates what kind of loan you’d likely qualify for. The process is simple and easy.