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ANSWERS FOR FIRST TIME HOME BUYERS
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Things to Consider Before Buying a Home
1. Select a Location:
How far are you willing to commute to work?
How far away do you want to be from relatives?
Do you have a preference for a specific school district?
Do you want to walk to shopping?
What amenities (pool, tennis, golf, security, etc.) are important to you?
2. Determine Your Price Range
Entry level/starter homes
Mid-range/move-up
Luxury communities
3. Financial Capacity
Get prequalified before looking for a home
Estimate at least 3% of the purchase price for closing costs
Determine how much of your saving will be used as a down payment
If renting, when does the lease expire?
If you own, do you need to sell your present home?
Tips:
1. Do your homework. Find new homes and builders via the media and through referrals. Read the local newspaper, check the Internet, and new home publications, or contact a real estate professional who can assist you. Real Estate companies are familiar with area builders, their products and prices.
2. Know the upper price range that you can afford, and the payments that best fit your financial conditions.
3. Match the price range of homes that meet your needs and shop those communities and builders. Follow directional signs and check newspaper, Internet and magazine ads.
4. Gather price/plan/feature information from the builders
5. Compare the information and quantify the best locations, plan, price, features, and financing options.
6. Check the builders reputation for quality and service.
7. Understand the warranty program and all extra features that builders offer.
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PHONE: 252-268-6629
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A Simple Guide For First Time Home Buyers
First Class Help for First Time Buyers
There are many special programs that can make getting the first mortgage easier. Some of the better known national programs include:
FHA (Federal Housing Administration)
Loans are government insured mortgages primarily for first-time home buyers. These loans allow you to buy a home with a lower down payment, and come with guidelines that let more people qualify. They're available from most mortgage lenders. There may be specific benefits and restrictions to FHA Loans in your area; ask your mortgage lender.
VA (Veterans Administration)
Loans are available to veterans of the armed services, those currently on active duty or in the reserve, and their spouses. A VA loan can make it possible to buy a home with no money down.
Rural Housing and Community Development Service (RHCDS)
RHCDS provides home financing to qualified borrowers who are unable to obtain home financing elsewhere. If you are a farmer, or live in a rural area, ask your mortgage lender if you may qualify.
There are many other loan programs that offer home buyers low down payments and have guidelines that let more people qualify. They may be administered by state or local governments, or other organizations. Be sure to ask your mortgage lender what other programs are available in your area, especially for first-time home buyers.
Getting Started
Many people buying their first home are afraid lenders don't really want to work with them. But that s simply not true. Without you, there would be no mortgage lending business. Lenders want to help you buy your first house!
I really want to own my own home, but I'm not sure I can afford it. Where do I start?
Lots of people don't even consider buying a home because they're afraid they can't afford it. But for most people, home ownership is within reach - especially with some of the special programs for first-time home buyers. In fact, for many, home ownership is as affordable as renting in some cases even more affordable.
How do I know how much house I can afford?
Before you start looking at homes, you need to have some idea of what you can afford. As a general guide, you can purchase a home with a value of two to three times your annual household income, depending on your savings and debts. However, you may be able to take advantage of special loan programs for first time buyers to purchase a home with a higher value.
If you'd like to know more exactly how much you can afford, talk to a mortgage lender. If you're working with a real estate professional, he or she can help you with this, too.
When should I talk to a mortgage banker?
The short answer: when you start thinking about buying a home. It's true you can't actually apply for a mortgage until you've chosen your home and signed a contract to buy it. But you shouldn't wait until then to start talking with a mortgage lender.
Any reputable mortgage lender will be happy to help you as you look for a home. The lender will work with you to determine how much house you can afford, help steer you to special mortgages for first time home buyers, and perhaps make suggestions that could make it easier to get the best mortgage for you.
Another advantage: you'll already have a good relationship with a lender when it comes time to apply for your mortgage. Only a mortgage lender is qualified to evaluate your financial situation and match your needs with the best available type of mortgage.
Do they really need to know everything about me for the application?
It may seem that way - but actually all your mortgage lender needs to know about you is your employment and finances, and information about the home you're buying.
However, you will need to provide quite a few details about these topics, and your application process will go much more smoothly if you're prepared. Be sure to ask your mortgage lender what information you'll need to complete your application.
How much will my credit history affect my ability to get a mortgage?
Many home buyers are very worried about this issue. We've even heard one story that an applicant was denied a mortgage because he had returned a rented videotape late!
Of course, that could never happen. And most people don't need to worry about the effects of their credit history. However, you can be better prepared if you get a copy of your credit report to review before you apply for your mortgage. That way, if there are any errors you can take steps to correct them before your application gets processed.
If you have had credit problems, be prepared to discuss them honestly with your mortgage lender - and come to your application meeting with a written explanation. Responsible mortgage lenders know there can be legitimate reasons for credit problems, such as unemployment, illness or other financial difficulties. If you had a problem that's been corrected, and your payments have been on time for a year or more, your credit will probably be considered satisfactory.
What happens after I've applied - and how long will it take?
Your lender will begin the work of verifying all the information you've provided. This process can take anywhere from one to six weeks, depending on the type of mortgage you choose, whether you're buying a home outside your local community, and other factors.
Within three business days after your application, the lender must give you an estimate of your closing costs. (The closing is the actual settlement of your loan.) You'll also get a statement that shows your estimated monthly payment, the cost of your finance charges, and other facts about your mortgage.
For many home buyers, this waiting period can be nerve wracking. Stay in touch with your mortgage lender, be prepared to answer any questions that might come up - and remember that mortgage lenders are in the business of making loans, not denying them.
Some home buyers find the closing process to be one of the most intimidating aspects of buying a home because it's so unfamiliar. Ask your mortgage lender what to expect at your closing.
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PHONE: 252-268-6629FREE E-BOOK
"SECRETS TO HOME BUYING"SAVE THOUSANDS OF DOLLARS
by: Jeffrey Lovett
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