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First time home buyer: Initial steps

Are you a first time home buyer? If so, it is better to get some home work done before you look for which type of homes to buy. As a first time home buyer, it is very important to ensure that the credit rating is good to excellent. Get hold of the latest credit report and ascertain that the rating is good. Next as a first time home buyer, it is essential to determine what mortgage amount you can afford to pay monthly. Banks and lenders always determine your debt to income ratio. This ratio ultimately determines the amount you can get as mortgage.

Pre approval of mortgage loan is the next step to be taken by the first time home buyer. It is always better to apply for a mortgage from the bank in which you have your account. This helps in many ways not only for the bankers but also for you. A first time home buyer is always in an advantageous position when negotiating with the seller of a home. The seller is more confident to discuss in detail once he comes to know that the prospective first time home buyer has a pre approved loan.

The other steps are to determine the mortgage period, frequency of payments, mortgage interest rates, down payment, mortgage insurance if necessary etc., At this point the first time home buyer should get in touch with a close relative or a friends and get some advice on these matters. Internet provides lot of information about the mortgage, rates of interest etc., The first time home buyer has to shop around for the best mortgage offer and then decide which one to accept.