Articles - First Time Buyers
1. How Do I Buy A House?
2. Making it affordable: Nine tips for first time home buyers
1. How Do I Buy A House?
By Andrew L.
There is no doubt that the market for houses has been on fire recently. More and more people are taking advantage of low interest rates and easy mortgage loan terms to go from being renters to being home owners. With so many people entering the market, it is inevitable that questions will arise.
There are many things to consider when buying your first home. Some of the most important steps to buy a house are:
Learning the home buying process
Start by learning as much as you can about how the home buying and mortgage application process works. Read as much as you can about buying a home. Check out the many books in your local library that offer hints to first time home buyers. Read financial web sites on the internet for tips for first time home buyers. You may even want to sign up for a class aimed at first time homeowners. Many towns and cities offer these kinds of classes, and they can be a great source of information for the buyer looking for his or her first home.
Find out the pre-qualified price range
It is important to find out how much you can borrow before you start looking for a home. Talk with several mortgage lenders in your area and get pre-qualified for a particular price range. The mortgage lender will be able to help you determine how much you can borrow based on your annual income. In general, mortgage lenders recommend that all home related expenses, including the mortgage payment, insurance premiums and real estate taxes, do not exceed 28% of your monthly income.
Get Pre-approved for mortgage loan
The next step is to get pre-approved for mortgage financing. This is similar to getting pre-qualified for a price range, but it is a more formal process. You will need to supply proof of your income for the pre-approval process to move forward. Most lenders will want to see income tax returns from the past two years as proof of the income you are claiming.
House hunting
After you have been pre-approved for your mortgage loan, it is time to actually start house hunting with a realtor (find out why you need to find a realtor before buying a house?). Your mortgage lender will give you a letter stating that you have been pre-approved for a mortgage and the amount you are authorized to borrow. You will need to present this letter to the real estate agent when you get started. It is important to get pre-approved for a mortgage loan before beginning your home search. The real estate agent and real estate company will be much more willing to work with you if they know you can afford the home you are looking at. In addition, sellers will take your offer much more seriously if it is accompanied by a pre-approval letter from your mortgage lender.
Make an offer
Once you have found a home that meets your needs, it is time to make an offer on the property. You will already know the most you can spend from the pre-approval process, and you probably will have your own ideas on what the property is actually worth. In addition, your real estate agent can guide you through the negotiation process and offer procedures. A copy of your pre-approval letter will be presented as part of the written offer. This will ensure the seller that your offer is legitimate.
Negotiation process
If the seller accepts your first offer, congratulations. Your negotiations are over and you're ready to start preparing for your move. More likely, however, is that the seller will come back with a counter-offer. This negotiation process can go on for a short or long amount of time, depending on factors like the motivation of the seller, the local real estate market, and a host of other factors. The real estate agent will be a good guide through the negotiation process. After all, he or she will have been through this process many times before.
Provide copy of Purchase and Sale Agreement to mortgage broker
After the negotiation process has been completed, you will need to present your mortgage broker with a copy of the Purchase and Sale Agreement for the home.
Work to close the mortgage loan
After presenting the Purchase and Sales Agreement, you will need to work with the mortgage broker to ensure you meet all the conditions required for the closing of the mortgage loan.
Home inspection prior closing
Prior to closing, you will want to make sure to have a thorough home inspection performed by a qualified and certified home inspector. A home inspection will protect you from flaws in the construction and condition of the home that are not obvious to the naked eye. Home inspections can uncover things like foundation cracks, termite infestation and other home quality issues.
Hand over down payment
After the home inspection has been performed and the report has come back clean (or all the items uncovered have been repaired), it is time for the buyer to actually hand over the money for the down payment and sign the loan documents.
Collect the house key
After the closing of the loan, the fun part of home buying begins. Your real estate agent will hand over the keys to your new home and you can actually move in and enjoy your beautiful new home. Welcome to moving day!
Andrew is the web owner of Home Buying and Home Selling Guide: How to buy a house and sell house fast!, a website that provides informational guide on home buying, selling house, home mortgage loan, foreclosure home, real estate investment, and more.
***Article Source Link**
http://www.ezinearticles.com/?How-Do-I-Buy-A-House?&id=39172
Begin By Requesting A free, No-Obligation Quote Today.
2. Making it affordable: Nine tips for first time home buyers
By Charles Warnock
It seems that everyone loves a good real estate story. The media is filled with reports about soaring property values and home owners of modest means becoming instant millionaires when they sell. As a result, many first time home buyers, afraid of missing out, will rush into buying decisions and achieve less-than-spectacular results. As a first time buyer, your biggest challenge is to balance livability and profitability in a way that makes sense for you and your family. Remember, you are buying a home first and an investment second. Of course, theres no foolproof formula for buyer success, but there are steps you can take to stack the odds in your favor:
Tip 1: Dont bet on market timing
If youre waiting for prices to drop in places like Southern California, Washington D.C. or Miami, you may be waiting a very long time. In regions that are built out with limited room to expand, its not realistic to assume property values will fall dramatically. Of course, prices in the nations super-heated residential markets (much of California, Nassau-Suffolk Counties in New York, South Florida) should cool down at some point, but theres no guarantee that higher interest rates wont eat up any savings from a price correction. If your personal circumstances say its time to buy, high prices alone shouldnt keep you on the sidelines. Current interest rates are still historically low, so you may consider locking in a mortgage before rates head north. Even in booming markets, there are good deals for those willing to devote some time and energy to finding them.
Tip 2: Leverage free and low-cost resources
Theres an abundance of free and low-cost resources for homebuyers on the Web. A Web search can turn up helpful articles, buyer guides, online tools and purchase/ refinance calculators. Keep an eye out for helpful tools like step-by-step guides and checklists to help organize your search. Some Web sites now offer online tools to help you estimate home prices and search for undervalued properties. Many offers on the Web for free property valuations actually are come-ons from real estate brokers looking for seller listings, so check first to see what strings are attached.
Tip 3: Check out the new models
Real estates old guard seems to be under assault at every turn today as traditional brokers battle competition from discount and Web-based brokers. Today, buyers have more options than ever before. You can use a full-service broker, discount broker or buy without a broker. To make buying more affordable, consider the homebuyer rebate programs that are becoming more popular. Rebates can help offset closing costs, which are a real obstacle for many first-time buyers. Be aware that some states currently ban real estate rebates all together, and others limit rebates to credits applied to closing costs. Rebate fans around the nation are keeping a close eye on Kentucky, as the Justice Department recently sued the Kentucky Real Estate Commission for violating antitrust laws. Kentucky is one of 15 states that ban or limit real estate rebates.
Tip 4: Lock in a realistic budget
To save time and trouble, first time buyers should have a realistic budget in mind before they shop for homes. One way to determine how much house you can afford is to get pre-approved by a lender. Pre-approval means you know exactly how much of a loan youll qualify for, so you can limit your search to homes in the right price range. Pre-approval also boosts your credibility and negotiation position with sellers. Most lenders will offer pre-approval as a no-obligation free service, in hopes of winning your business.
Tip 5: Buying personal decision, business transaction
The Department of Housing and Urban Development (HUD) advises home buyers to create a wish list to help focus priorities. That way, youll remember that a spectacular foyer is nice-to-have, but safety and services are essential. Having clear goals will help keep you from getting carried away with emotional factors. Sellers who love their homes tend to ask too much, and buyers who fall in love can end up overpaying. With a little research, you can get can get an objective estimate of property value to make sure the seller has set a fair asking price. There are tools and resources on the Web to help you better understand home valuations.
Tip 6: Dont let closing costs surprise you
Once you understand the buying process, you should understand and budget for transaction costs. In addition to your down payment, buyers pay most of the closing costs when purchasing a home, including things like inspection fees, title insurance, taxes and more. Closing fees can add up to 5-7 percent of purchase price, and must be paid before you get the keys. Your lender can provide whats called a good faith estimate of your closing costs. Most closing costs are not negotiable but some are. When youre comparing lenders, dont be shy ask which fees are negotiable, then ask if any discounts are available. Finally, be cautious about no-cost closing promotions because the lender may be simply passing on the costs in the form of a higher interest rate.
Tip 7: Build a support team
Buying a home is a big investment and a big decision, but you dont have to go it alone. Remember, at each step of the way, there are people and resources to help you. Use the Internet and ask friends for referrals. Dont be afraid to pick up the phone and call real estate professionals, mortgage providers, title companies and insurers to ask questions. These professionals should be good resources to help you learn more about home buying, because they want to earn your business. If they are not helpful, then you have also learned something important that they dont deserve your business.
Tip 8: Clean up your credit
Low credit ratings mean that buyers won't qualify for the best available interest rates and fees, which could mean considerable extra expense each month for the life of the loan. Most financial institutions today offer risk-based lending lower credit risk for lenders means better mortgage deals for customers. Credit reports frequently contain inaccurate information, which can hurt a buyers purchasing power. First-time buyers should check their credit scores and fix any problems before applying for financing.
Tip 9: Begin with the end in mind
Author Stephen Coveys advice for effective living also applies to effective home buying. Resale may not your primary consideration, but its an important factor. Can you buy in an up-and-coming neighborhood or region? How is the commutability from your new home to local employers? How good are the local schools? A few queries to your favorite search engine will turn up free or inexpensive school rating services. Also be on the lookout for outdated features when you buy. If the those small closets and harvest gold appliances seem out of step now, you can bet that they wont look any better to prospective buyers in a few years.
Charles Warnock is Marketing Communications Manager at Homekeys, a South-Florida based provider of real estate technology and services. He writes often on real estate, finance, interactive marketing and business development. For more information, visit http://www.homekeys.net
***Article Source Link**
http://ezinearticles.com/?Making-it-affordable:-Nine-tips-for-first-time-home-buyers&id=38647
Begin By Requesting A free, No-Obligation Quote Today.