Introduction
It is common to get ‘jitters’ when applying for first time loans especially if you are buying a home. There is often a mixed feeling of excitement and fear at the same time. The idea of owning your own home is a major milestone in your life; however, thinking of how to fund your dream can create anxiety. Of course, there is also the fear of approaching lenders for first time loans. The tricky part comes when you either have a below average credit score or no credit history at all. Sadly, these two situations are almost similar in the eyes of the lenders. Information is power, and the first thing you should do is to read information on first time loans. This will shed light on the situation as opposed to taking a hit or miss strategy. The following steps will make securing your first loan much easier and smoother.
History
1. It is in your best interest if you make a reasonable amount of down payment for your home. Lenders will be more willing to loan you funds if you strive to pay at least 20 percent of the total cost. This demonstrates that you are a serious and responsible borrower. Gather as much as you can even if it means borrowing from family members.
2. Take a look at some of the program for first time owners offered by the Federal Housing Administration. Here you are likely to get mortgage opportunities and relatively cheap first time loans with low closing costs and down payments.
Features
3. Have a look at your credit report and find a way of fixing all the red flags. You credit score will defiantly determine whether or not lenders will approve your loan. They may approve it but charge high interest because they consider you a high risk borrower. Credit reports are subject to errors and omissions and you should have them fixed before approaching first time loans lenders. If you have no credit history, you should consider applying for a credit card and ensure that you honor your payments in good time as this will help you build your score. You can also search for bad credit mortgage lenders and compare their rates to get the best.
4. Comparison shopping is an important tool when shopping for first time loans. Do not sign up with the first lender you come across. Source for quotes from different lenders and make a comparison based on interest rates and their terms.
Tips and comments
Getting a house can be very exciting, however, try not to get too emotional by forgetting your current financial capabilities. The last thing you want on your record is a foreclosure, a seizure and worst of all being declared bankrupt. All these situations can greatly damage your credit report and eliminate any chances of being approved for a loan in future. Only apply for a loan which you can comfortably service to the end, work on repairing your scores in order to enjoy better credit facilities.
