For many people, the chance to own their own home is at the top of their bucket list. Maneuvering the world of mortgage loans can be difficult and confusing, taking what could be a wonderful adventure and making it a nightmare. To lessen any anxiety you might have, it’s important to take a vital first step and research which mortgage company is right for you. Beyond that, make sure your credit score is good and seek out pre-approval. These three key points can make purchasing your first home less scary and more enjoyable. Follow the tips below for choosing a consumer real estate finance company to help finance your home purchase plan today.

Start Working on Your Credit Score

It’s important to monitor your credit score, pay your bills on time, and avoid debts that could increase your debt to income ratio (DTI). You may find mistakes in your credit score, which could make approval for a mortgage more difficult. Your credit report will contain a snapshot of how you’ve used credit in the past ten years. A quarter of the population with credit scores has at least one error on their report. And 5% had errors that could prevent them from easily obtaining a loan. Monitoring your credit score consistently and disputing any errors will keep your score in tip-top shape.

Research Different Mortgage Options

There are a variety of mortgage loans to consider. If you are a first-time home buyer, there is a loan specifically for you. There are FHA and VA loans and Jumbo and Conventional loans. A mortgage lender can provide you with options and assist you in discovering which loan type is best for you. Some loans specifically consider your credit score, while others are focused on mortgage rates. The choice can be overwhelming if you do not have assistance to help you wade through the vast amounts of information.

Seek Pre-approval First

It is vital to check your availability with mortgage lenders before starting the home buying process. The information they provide will steer you to what homes you can afford, alleviating frustrations from the beginning. A pre-approval letter will also show how dedicated you are to the home buying process. This can also give you a leg up and be a time-saving measure when you find the home of your dreams. If there are multiple offers, the sellers may lean towards the pre-qualified buyer. You don’t want to be left behind in an aggressive housing market because you do not have pre-approval documentation.

Compare Estimates for the Best Deal

A loan estimate is a useful document given to potential homeowners by their choice lenders. On the document, several details are highlighted, including the address of the property you are interested in, your loan details, interest rates, monthly premiums, and any other fees. Once you receive estimates from lenders on your shortlist, you can compare them to pick one that best fits your needs. If you have questions about the information they provide, it’s important to get answers to make an informed decision.