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