Buying your first home comes with many big decisions. It is easy to overlook some crucial points, messing up the entire home buying experience. For instance, when applying for first time home buyer programs Utah, small mistakes could end up becoming lifetime regrets.
In that light, due diligence is critical when buying a home. This post highlights the crucial mistakes to avoid while applying for Utah housing’s first-time homebuyer program. Are you just getting started or in the process of applying for Utah housing first-time homebuyer programs https://www.staplesgroupmortgage.com/? Avoid making these mistakes, as they could end up messing up the entire home buying process.
Table of Contents
1. Spending All Savings On Down Payment
Just because paying a substantial down payment could get you preapproved for a more considerable amount, it is not necessarily a financially sound decision. Many first time homebuyers have found themselves house poor after paying up to 30% down payment. Do not make such mistakes, as you will need money to pay property maintenance. Thus, it is critical to have enough money at hand to pay other costs associated with homeownership. Consider Utah housing down payment assistance programs for low down payment mortgage options. Different down payment assistance programs include:
- Federal Housing Administration Home Loan: Requires as little as 3.5% down payment
- Veteran Affairs Home Loan: 0% down payment
- United States Department of Agriculture Home Loan: 0% Down Payment
- HomeReady Home Program: 3% Down payment
Through the different Utah housing down payment programs, homebuyers can save more cash and use it to fund property maintenance.
2. Not Shopping For Best Home Mortgage Types
Did you know that there are many home loan types classified under Utah housing down payment assistance programs? Many home buyers overlook multiple down payment assistance programs, that could save them a huge amount of money. Before applying for a particular home buying home loan, be sure you have evaluated the different alternatives. This gives you a clear understanding of what each of the home loans require.
3. Not Comparing Lenders
Many first time homebuyers spend a lot of time and effort searching for the perfect home, and fail to give the same effort in evaluating the different mortgage lenders. Did you know that different home mortgage lenders charge varying rates on home loans? Although Utah housing down payment assistance programs are mostly government sponsored, the mortgage lenders get to decide the interest rates, and mortgage application terms.
Thus, the interest rates and overall cost of applying for a 3.5% down payment FHA home loan may vary from one lender to another. Do not apply for a home mortgage without taking time to evaluate what different mortgage lenders charge in terms of interest rates and overall cost of borrowing. This way, you could save a huge amount that can go into property maintenance or mortgage repayment.
4. Failing To Consult A Mortgage Broker
Mortgage brokers in Utah have a good understanding of the Utah mortgage industry. They collaborate with the mortgage lenders and the realtors, making them a crucial stakeholder. The mortgage brokers could help discover the best mortgage type to finance your new home. Moreover, the mortgage brokers have existing relationships with mortgage lenders and could help you negotiate for a better interest rate on different Utah housing down payment assistance programs.
5. Failing To Check Your Credit Score
Credit score is a very important indicator in the mortgage industry. The mortgage lenders will consider your credit score not only to determine whether to lend you money, but also to calculate the interest rate. Besides, the credit score goes into determining the down payment amount. For instance, if applying for the FHA home loan and you have a credit score of 550, you are expected to pay a down payment of not less than 10%. Therefore, check and work on improving your credit score prior to submitting the application for mortgage pre approval.
6. Home Searching Before Seeking Mortgage Pre Approval
The mortgage pre approval letter should guide your home hunting exercise. Consider that you may fall in love with a particular home, but fail to afford to buy it based on the amount pre approved. To avoid such disappointments, it is advisable that you consider applying for mortgage pre approval before beginning the home search process.
7. Failing To Stick To your Budget
Budgeting for a home is a crucial undertaking. You want to avoid buying more home than you can afford. Therefore, come up with a budget and make sure to stick by it. Otherwise, you will end up borrowing more than you can repay. The consequences of buying a home you cannot afford will be foreclosure or a bad credit score, consequently affecting your ability to qualify for a mortgage in future.
Therefore, avoid the mistakes we have explained in this post. This will ensure your home buying process is smooth.