|Top 10 Tips for First Time Home
There's good news for renters!
Recent dramatic changes in the mortgage finance industry have placed
homeownership within easy reach of a greater number of New Englanders.
A common obstacle today in purchasing a home is the outdated notion
that obtaining a mortgage is an awesome task. Often, it is a lack
of simple information, rather than a lack of money, that keeps people
from even considering filling out a loan application. In fact, many
can afford a new home for the same or slightly more than they are
paying in rent now. The following tips can help potential homebuyers
find the right start in locating a new home they can live in and
a mortgage they can live with.
1. Pre-Qualify Before You
Pre-qualification allows you to get an idea of your borrowing potential
before beginning your home search. Pre-qualification is usually
free and the buyer's ability to purchase a home can be confirmed
quickly. This step increases the buyer's leverage position with
Realtors and sellers.
2. Demonstrate You Can
Pull Your Weight
A mortgage lender wants to know that your income can comfortably
cover monthly mortgage payments and your assets are sufficient to
cover the downpayment and closing costs. Acceptable sources of household
income include earnings from your regular job and any secondary
jobs, as well as overtime, commissions and bonuses. Also acceptable
are interest and dividend income; social security, VA and retirement
benefits; disability, welfare and unemployment benefits, alimony,
child support and other entitilements. A steady work history - continuous
employment at the some company or line of business with consistent
or rising income - helps the lender determine your ability to maintain
the responsibility of a mortgage.
3. Make It Understood,
Your Credit Is Good
Looking at your credit history is another way mortgage lenders determine
your obligation to pay back a loan. Good credit history consists
of a two-year history of prompt payments, a good record of on-time
payments and no outstanding judgments or liens. Your mortgage consultant
can help you address and correct any past credit problems in such
a way that your chance of credit approval will be greater. For example,
if you have ever encountered some credit problems due to a lengthy
illness, proper explanation for the problem can go a long way to
rectify the negative perception created by a temporary set back.
4. The Program Is Key -
Not The Rate You See
Don't be misled by a lowball rate; be sure to check out the details
of the loan program. Most mortgages have either a fixed rate (payments
remain the same for the life of the loan) or an adjustable rate
(payments adjust up or down in accordance with national interest
rates) and a term (amount of time you have to repay the loan) of
either 15 or 30 years. Downpayment requirements differ from program
to program. There are many first-time buyer programs that require
as little as 3% down, as opposed to conventional programs that require
up to 20% of the new home's sales price. Easier qualifying guidelines
and reduced closing cost options are features of many of the programs
5. Pick A Real Estate Pro,
Find a well-established Realtor who is familiar with the areas of
your choice. Ask real estate professionals if they will be representing
you as a sub-agent or as a buyer-broker agent. Selecting a qualified
agent, who is able to answer your questions regarding the area,
population, school districts, taxes, etc., will be a big time-saver,
since he or she will save you a trip to the local records department.
6. Know What You Need And
What You'll Concede
What is essential to one homebuyer may be of no value to another.
Creating "need-to-have" and "nice-to-have" lists
can be helpful. Your first "need-to-have" list may be
very different from your final version; still, it serves as a starting
point for you to discuss and decide upon those features that are
the absolute essentials. For instance, public transportation to
shopping areas might be a "need-to-have" if you do not
own a car, while it is another person's "nice-to-have."
If someone in your family is disabled, a one-level home with wheel
chair access may be a necessary feature. However, you may decide
that adding a customized ramp after the home purchase is more cost
effective. Identifying what you want and what you need helps your
real estate agent pinpoint your ideal home.
7. Keep Score Of The Houses You Tour
After inspecting a home, record its positive and negative aspects
and write down your overall impressions. Eliminate those homes which
do not measure up to your satisfaction. Review your "nice-to-have"
list to see how many additional positive points each property may
possess. These scorecards will be very helpful in narrowing the
field for your final selection.
Article continued at http://www.mortgagealmanac.com/articles/95-100-toptentips.html