Buying your first home is exciting. At first.
If you’re like most, at some point the anxiety creeps in. It’s normal. As with anything new, you have questions, you may have fears and, at times, may even feel stressed out. Even repeat homebuyers feel anxious during the homebuying process.
“As it turns out, many Americans, about 40%, say buying a new home is the most stressful event in modern life …” according to housingwire.com’s Kelsey Ramirez, citing a survey by a nation-wide real estate website.
Thirty-three percent of those surveyed said they were reduced to tears at some point during the homebuying process.
It all boils down to a lack of confidence-the same malady that afflicts all of us when learning a new process.
There are certain points in the process that are more stressful than others so today we’ll introduce you to those and point you to where you can learn more.
Learn all you can about the mortgage process
Surveys say that most consumers know very little about mortgages. For instance, “Many people believe that if you don’t have at least 20% down, you can’t buy a home,” according to the folks at rocketmortgage.com.
It’s a myth. There are many home loans on the market with only a 3% down payment requirement. Some have zero down payment terms.
Rules for qualifying for a mortgage are also misunderstood. Many consumers are under the impression that the qualification process is stricter than it is. Yet, when asked about qualification standards, such as debt-to-income ratio, about half of the buyers surveyed didn’t know anything about them.
If you don’t think you can afford a home, you may be laboring under some common misconceptions. When you clear those up, you’ll go into the mortgage application process far more confidently. Here are some websites to help you get up to speed:
Once you’re familiar with the process, start searching for a lender. Ask friends, family and colleagues who they used (if they had a good experience).
Then, start applying for mortgages, keeping an eye out for the lender that is the best at getting back to you promptly and that is able to explain things in easy-to-understand terms.
Go ahead and apply to several. You are under no obligation if they say yes and, it gives you a chance to compare lenders to find the best rates and terms.
If you’re worried about your credit score from all of credit pulls, don’t be. “Fair Isaac Corp. (FICO), the creator of the FICO model, states that multiple mortgage inquiries that occur within 30 days of one another do not affect your FICO score,” according to Greg Depersio at investopedia.com.
To be safe, according to Craig Berry at themortgagereports.com, try to submit all of your loan applications within a two week period.
Stressed about the down payment?
Earlier, we discussed the down payment myth. For some homebuyers, however, even a 3% down payment is a fortune. It shouldn’t stop you from pursuing your dream of homeownership, however.
If you serve, or have served in our nation’s military, or you are the surviving spouse of someone who served, you may qualify for a U.S. Department of Veterans Affairs (VA) home loan. These loans require zero down payment. Learn more about this program at va.gov.
The U.S. Department of Agriculture (USDA) also offers a no-down mortgage for those who wish to purchase in eligible rural areas. To learn if the home you have your eye on is considered “eligible,” enter the address here.
The USDA offers several programs and you can learn more about them online at usda.gov.
You’ll can also apply for the various municipality, state and federal down payment assistance programs. Ask your lender for a list or search online.
Hire the right real estate agent
Interview real estate agents carefully to ensure that you find the right one for your needs. After all, your real estate agent will be your advocate during the homebuying process; you’ll be doing a lot of leaning on your agent.
During the interviews, ask questions, share your concerns and pay attention to the responses. Choose someone who understands how stressful the process can be and helps put you at ease.
It has been said that “knowledge is power.” The more you know about the process of buying a home, the more empowered and less stressed you’ll feel.
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