| Buying your first home and becoming a home | | | | to a more comprehensive mls listing service and |
| owner is one of the most exciting steps in any | | | | should be able to screen your search for you. The |
| person's life. With home loan purchase rates at | | | | Sunday classified ads always list the home sales in |
| the lowest they have been in decades, this is an | | | | your area and often include the "For Sale By |
| opportune time to purchase a home. At Bad | | | | Owner" listings that are typically not included in the |
| Credit Lender, we work with affiliate mortgage | | | | mls listings. One final place to look is at or your |
| brokers who work hard to find you the lowest | | | | local reader in the classifieds section.5) Check it |
| rate possible. We can help you analyze your | | | | out and make an offerDriving by homes and |
| financial situation quickly and efficiently, allowing | | | | walking through Open Houses is certainly exciting |
| you to have a solid understanding of what you | | | | -- it gives you an opportunity to imagine yourself |
| can afford and how much a lender will reasonably | | | | living in the various spaces. There are lots of |
| allow you to borrow.Buying your first home and | | | | items that you should be checking for, however, |
| acquiring a home loan can seem like a daunting | | | | this subject is beyond the scope of this article. In |
| task. The best way to approach getting a loan | | | | the event that you like the home, you or your |
| and finding a home is to take it one step at a | | | | realtor can make the seller or the seller's agent an |
| time. Here are seven steps that will help you | | | | offer on the home. In a hot market where |
| purchase your first home.1) What Can You | | | | homes are being bought up quickly, it is a good |
| AffordDetermining what you can afford in the | | | | idea to make an offer that is close, if not slightly |
| housing market is one of the most important | | | | over, the seller's price. In a slow market where |
| steps as it helps define your search for a home | | | | homes are sitting for months at a time, you can |
| loan and lets you find a comfortable mortgage | | | | offer an initial price that may challenge the seller's |
| amount that will allow you to find the home of | | | | desire to sell at a lower cost. Your offer should |
| your dreams without any undue burden. Some of | | | | include the following:Seller concessions (if |
| the considerations to take into account include | | | | applicable) |
| your household monthly income, your current | | | | Financing contingencies (if applicable) |
| level of debt (monthly bills, car payments, credit | | | | Home inspection contingencies (if applicable) |
| cards, etc.), your credit score, and the amount | | | | A specific outline of what is to be included in the |
| you will put down initially. Once you have a basic | | | | sale of the Home |
| understanding of what the household earns minus | | | | The "earnest money" deposit amount to be |
| what the household spends, it is much easier to | | | | tendered with the offerOnce your offer has been |
| determine a comfortable monthly mortgage | | | | made, the seller will then decide to accept it, |
| amount. Take these numbers to your mortgage | | | | reject it or counter offer. Once you and the seller |
| broker or lender and they can then go over what | | | | agree on a home price, both parties will sign a |
| this will allow you to buy given certain loan | | | | home purchase agreement that will include the |
| scenarios (including the tax deductions available for | | | | agreed upon terms, escrow period, etc. If you |
| the interest portion of your home loan).2) Get | | | | are working with a realtor, they will handle all of |
| Pre-qualified for a Home LoanIf you are really | | | | these steps for you (hopefully in a timely and |
| serious about buying a home, it is very important | | | | efficient manner).6) Lock up that interest rate and |
| to at least be pre-qualified for a loan. Getting | | | | find the right loanYour mortgage broker or lender |
| pre-qualified means a cursory examination from a | | | | can lock in an interest rate for 30 days or 60 |
| mortgage broker or financial institution who can | | | | days until your home closes and you move in, |
| verify your level of income, credit score and | | | | insuring that you know exactly how much your |
| current debt and can quickly tell you much you | | | | mortgage will set be once you move in. This |
| can afford to borrow.Many realtors or home | | | | protects you if the interest rates rise during your |
| owners will not accept an initial offer on their | | | | escrow period. If rates go down during this time, |
| home without a pre-qualification letter. Once you | | | | you can usually renegotiate and get this lower |
| do have your pre-qualifying letter, you can begin | | | | rate. Locking in an interest rate is a win win |
| to search for a house, confident that if you do | | | | situation for the borrower.There are two main |
| find one, that you can make an initial offer on it. | | | | types of home loans -- fixed rate and adjustable. |
| As well, the pre-qualification process will give you | | | | Fixed-rate loans divide the amount to be repaid |
| a much better idea of the loan amount that you | | | | over a set number of years. "Fixed rate" means |
| qualify for.3) Do One Better: Get | | | | that no matter how the interest rate fluctuates |
| Pre-approvedGetting pre-approved for a home | | | | over the years, the amount of payment will |
| loan tells the home seller and your realtor that | | | | remain the same. If the interest rate dips, your |
| you are ready to make the commitment. The | | | | mortgage consultant will help you refinance to |
| pre-approval process is a bit more intensive than | | | | take advantage of the lower rate.Adjustable rate |
| getting pre-qualified but pays off in the end. In | | | | mortgages (ARMs) are dependent on the |
| order to become preapproved, you will give your | | | | fluctuation of the interest rate over time. A five |
| lender your W-2 or 1099 Forms, Paycheck Stubs, | | | | year ARM is a fixed rate for five years but once |
| as well as savings or checking acccount | | | | this period ends your loan rate will fluctuate based |
| statements. In addition, it is necessary to run your | | | | on the market rate. When the rate is low, |
| credit, unless you have a recent credit report | | | | payments are low, but when interest rates are |
| copy handy. The real advantage of pre-approval is | | | | high, the payment increases also. ARMs are |
| it drastically cuts down on any problems that may | | | | slightly easier to qualify for than fixed-rate loans, |
| be lurking in your credit or financials that might | | | | but they also carry more risks.7) Closing and |
| block you from obtaining the home you want.4) | | | | moving inYou or your realtor should have a |
| The Fun Part: Searching for your new homeWith | | | | checklist of items that have to be accomplished |
| the advent of the internet, there are loads of | | | | during the 30, 60 or 90 day escrow period. Home |
| ways for you to search for your new home. One | | | | inspection, termite inspection, title on the |
| of the easiest is to find a realtor website that | | | | property, your final approval from the lending |
| allows you to search the mls listings. You can | | | | institution, etc.If all of this goes smoothly, you will |
| enter your minimum amount and maximum | | | | own your home and can now look forward to the |
| amount and the areas you would like to search | | | | fun task of moving all of your worldly possessions |
| and, viola, you will be given a list of homes for | | | | into your new home! Do your homework, take it |
| sale that meet your requirements. Of course, if | | | | one step at a time and enjoy the process! |
| you are using a realtor they should have access | | | | |