First-time homebuyers shopping for a mortgage can benefit from working with a Homeownership Advisor.

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a first-time homebuyer stands in front of her new home

Tips to help you manage the homebuying process and understand the

Thinking of buying a home in the next 12 months?  Whether you’re a first-time homebuyer or a repeat buyer, there are four ways you can make sure you are making the best decision when you buy: strengthen your credit, shop wisely for a mortgage, choose the right house and negotiate the best price.

NeighborWorks Home Partners homeownership advisors can help you with each of these steps.

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1. Check your credit score before looking for a mortgage.

The first step to shopping for a home has nothing to do with looking at houses. Before you hit the real estate sites, you need to look at your finances and understand your credit history. Then, use this information to figure out how much home you can afford. Even if you can already qualify for a mortgage, taking time to improve your credit could pay off by helping you get a lower mortgage rate.

According to a study conducted by online loan marketplace LendingTree, nearly one out of every ten mortgage applicants gets denied. (As in most 50-state rankings, Minnesota rises to the top with one of the best approval percentages.)  The primary reasons for denial were credit history (which includes credit score) and debt-to-income ratio.

NeighborWorks Home Partners’ homeownership advisors help buyers come up with a home purchase budget and resolve credit errors that can drag down credit scores.  Our homebuyer education and pre-purchase appointments also go over the rest of the steps involved in purchasing a home, so first-time buyers can be prepared and confident about the biggest purchase they may make in their lifetimes.

2. Shop around for the best mortgage.

First-time homebuyers often don’t realize they have choices and resources available to them. You can (and should!) shop for a mortgage to compare the rates and terms offered by different lenders; you are not limited to first-time homebuyer mortgage programs. Doing your homework can help you choose wisely and save you money. The price of failing to do so can be quite significant after several years. The average borrower could save $1,500 over the life of the loan by obtaining an extra rate quote when applying for a mortgage, according to a report from Freddie Mac. More than $3,000 could be saved by getting five quotes.

As important as it is to obtain the best mortgage rate, it’s also crucial to be aware of fees charged by mortgage lenders. These fees go by various names, which can make them harder to compare. A homeownership advisor can help you make sense of the confusion and find the best mortgage for your needs.

3. Choose your house carefully.

A homeownership advisor will also coach you through making a list of “must have” and “nice to have” features. With this list, your budget, and your mortgage approval letter, you’re ready to shop. A market with low housing supply often requires buyers to look for a “diamond in the rough”—a not-so-perfect house that could be rehabbed to make it suitable. And in a fast moving-market, there can be a lot of pressure to decide quickly. But that doesn’t mean you should settle for a house that doesn’t meet your basic needs. Keep your list of must-haves front and center, but make sure they are not really “nice-to-haves.”

4. Negotiate.

Even in the most competitive markets, there is always room for negotiation. Here’s where selecting the right real estate agent pays off. Whether it’s the price of the house (probably the most important item to negotiate), the portion of closing costs to be paid or whether a warranty for major appliances is included, presenting the seller with a list of requests is important. Remember, the seller wants to sell and you want to buy. Home purchases that are mutually beneficial are made in the middle.

The team at NeighborWorks Home Partners is on hand to help you prepare to buy a home so that you have a successful ownership experience. Buyers can start with advising appointments, 8-hour Home Stretch workshops, or our  “Homebuyer Basics” one-hour course.

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NeighborWorks Home Partners

NeighborWorks Home Partners’ mission is empowering individuals and communities by helping people buy, fix and keep their homes. Learn more.

651-292-8710 | Staff Directory
Main Office:
533 Dale Street N.
Saint Paul, MN 55103

Minneapolis Office:
1930 Glenwood Avenue
Minneapolis, MN 55405

EIN 41-1386089

An Affirmative Action, Equal Opportunity Employer

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