Before you can make the switch from renting to owning, you'll need to apply for a mortgage. If this is your first time going through the process, you'll probably be left with more questions than answers. Luckily, the professionals at EXIT Realty Urban Living in Jersey City, NJ, understand the confusion first-time homebuyers experience. Here, this trusted real estate company explains what you should know before you apply.
Ask a Real Estate Company: What to Know When Applying for Your First Mortgage
Before you approach a lender, you need to get a solid grasp on your budget. Take a look at your monthly earning and expenses, then decide how much of a monthly mortgage payment you can afford. Next, take that number and determine how much of it you're willing to spend. When you apply for your loan, your approval amount is usually configured at around 30% of your income, but in most cases, it's better to set your personal budget at a lower amount to avoid financial hardship.
Once your budget is finalized, most real estate companies suggest considering your mortgage options. The two most common are FHA and conventional loans. Rural areas can also utilize USDA loans, but if you live in the Greater Jersey City area, it's rarely an option. Both FHA and conventional loans offer advantages and disadvantages, but it's important to determine which option will work best for your situation so you can choose a lender that specializes in it.
3. Down Payment
You also need to be prepared for the down payment. Conventional loans typically demand 10–20% of the home price upon signing, while FHA loans require as little as 3.5%. Many first-time buyers overlook this aspect until later in the process, which leads to panic about how they'll come up with the funds. Luckily, there are many local and national grants for first-time homebuyers, and you can often cover the majority or all of your down payment with these services.
Once you've obtained your mortgage pre-approval, contact EXIT Realty Urban Living to find your dream home. This Hudson County real estate company offers a modern approach to the classic home search. With a combination of state-of-the-art tools and personal experience, they will locate hidden gems that meet your preferences and budgetary restraints. Begin your search by browsing properties for sale in your area online, and arrange an appointment with the real estate agency by calling (201) 380-4200.