Forward Bank

You’ve decided to buy your first home. That’s great! This is a big financial decision that likely took a lot of time and energy to make. With this decision comes an investment opportunity, more responsibility and a chance to make a home.

As a first-time homebuyer, you’ve probably received a lot of advice from friends and family, and you may have even started talking to a realtor. We’d also like to provide you with some advice about what you should know as a first-time homebuyer.

Dig Into Your Finances

Before you even start looking at houses, you need to have in-depth knowledge of your finances. You should know what your current financial situation is and how it will look to mortgage lenders. Go into the process knowing how much debt you have, what your total household income is, how much you have saved and what your credit score is.

Figure Out Your Optimal Down Payment and Monthly Payments

Generally, a down payment should be anywhere from 3-20% of the purchase price of your home. To qualify for different types of loans, you may need to make a down payment that’s a specific percentage of your home’s purchase price.

Based on the type of loan you qualify for, your current savings and your current income, you can figure out what your down payment and monthly payments should be.

Get Your Mortgage Paperwork in Order

It’s a good idea to get a jump on the mortgage process before you find the house of your dreams. Have the following documentation ready so you can get prequalified and pre-approved for your mortgage:

• Two years’ worth of tax returns
• Recent W-2s
• Pay stubs from at least the last 30 days
• Bank account statements
• Other assets statements (like retirement accounts)

Familiarize Yourself With the Buying Process

Talk to a realtor to have a good understanding of the whole home buying process before you start your home search.

This may mean getting pre-approved for a mortgage to make you a more qualified buyer and understanding all the steps between you deciding on a house and you moving in. These steps can include making an offer, having an appraisal done, getting an inspection, going through an option period, asking for repairs and the final walkthrough before you take ownership. Understanding the buying process will help you prepare and keep you up to date during these lengthy steps.

If you need help getting your finances in order before buying a home, contact a Forward Bank location near you. We can help you put together all of the paperwork you need and help you make financial decisions to set yourself up for success.