It's difficult to know exactly what to expect.
The learning curve can be steep,
but most of the issues can be resolved by doing a little financial homework at the outset.
The First 5 Steps
Check your credit
The homebuyer's credit score is among the most important factors when it comes to qualifying for a loan these days. To get a sense of where your credit stands, go to myBankrate to collect your credit report and score today, free and with no obligation. Scour the reports for mistakes, unpaid accounts or collection accounts.
Evaluate assets and liabilities
So you don't owe too much money and your payments are up to date. But how do you spend your money? Do you have piles of money left over every month, or are you on a shoestring budget?
Typically, the self-employed or independent contractor will need a solid 2 years' earnings history to show.
When applying for mortgages, homebuyers must document income and taxes.
Typically, mortgage lenders will request 2 recent pay stubs, the previous 2 years' W-2s, tax returns and the past 2 months of bank statements -- every page, even the blank ones.
Ideally you already know how much you can afford to spend before the mortgage lender tells you how much you qualify for.
By calculating debt-to-income ratio and factoring in a down payment, you will have a good idea of what you can afford, both upfront and monthly.
Figure out your down payment
It takes effort to scrape together the down payment. There are programs that can assist buyers with qualifying incomes and situations.
Check with friends, co-workers and neighbors to find out which lenders they enjoyed working with and ask them questions about the process and what other steps first-time homebuyers should take. You can also speak with our recommended mortgage lenders when you're starting the process.
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