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FIRST-TIME HOMEBUYER

First-Time Homebuyer Tips for Your First Home Loan

Before you start shopping for a new home or a home loan, here are some steps you can take to ensure that you are ready to buy – and can be best prepared to qualify.

1. Check your credit.

Review your credit report to see if there are things that are not correct and work on resolutions. To qualify, your credit score should be at least 580.

2. Determine your home budget.

Use our Loan Calculator to see what your monthly loan payment will be based on the price of the home and your down payment. 

3.  Know your loan options.

Check out our Loan Solutions for different types of loans. For example, an FHA loan requires a down payment as low as 3% and has relatively lenient requirements making it perfect for first-time homebuyers. 

4.  Compare rates and terms.

And don’t forget about service! Once you shop around, you’ll find that Town Square Mortgage offers competitive rates and terms and fast closings our Loan Originators have a stellar reputation for providing the best service possible. 

5. Get pre-approved for a home loan.

Work with one of our friendly Loan Originators to get pre-approved and get shopping for your new home.

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Smart Credit Practices

Pay your bills on time.

Late payments stay on your credit report for seven years, so be sure to pay your bills on time.

Pay credit balances strategically.

A good guideline: Use less than 30% of your limit on any card. Lower is even better. The highest scorers use less than 7%.

Ask for higher credit limits.

When your credit limit goes up and your balance stays the same, it instantly lowers your overall credit utilization, which can improve your credit. If your income has gone up or you've gained positive credit, you should be able to get a higher credit limit.

Dispute credit report errors.

A mistake on one of your credit reports could be pulling down your score. Disputing credit report errors can help you quickly improve your credit.

Deal with collections accounts quickly.

If you have any collection accounts, pay them off quickly and work with the creditor to report the pay-off to the credit reporting agencies.

 

Use a secured credit card to rebuild your credit.

Build or rebuild your credit with a secured credit card which is simply a card that backed by a cash deposit that acts as collateral for the card.

Get credit for rent and utility payments.

Work with a Rent Reporting Service to get your on-time rent and utility payments added to your credit report. In addition, Experian Boost™ is a free service that links your bank accounts to your credit report, so you get credit for on-time payments to monthly bills such as cable, Internet, streaming or mobile phone services.

Add to your credit mix.

If you only have credit cards, get a personal loan and pay it off on time over time.

What not to do before you apply for a home loan and before your loan closes.

1.     Don’t buy a new car or make any other large purchases.

2.     Don’t rack up debt of any kind.

3.     Don’t max out your credit cards.

4.     Don’t close any credit card accounts.

5.     Don’t forget to check your credit report.

6.     Don’t neglect to work on any necessary credit report resolutions.

7.     Don’t fall behind on your bills.

8.     Don’t switch jobs.

9.     Don’t co-sign on any loans.

10.   Don’t make any big deposits without verifying them (such as a gift letter for a cash from a relative).

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Connect with a Loan Originator Today!

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