Perks Of Being a First Time Home Buyer

Purchasing a home first time home-buyer can be an overwhelming experience. You need to take various things into thought, from finding the right agent to finding the appropriate home to financing. However, being a first time home-buyer does come with some substantial benefits.

As a first time home-buyer you often have access to outstanding loan programs that can work with you in getting into a home more rapidly and with less money than those who have purchased homes before. These loan programs offer you assistance such as low down payments, subsidized interest, and a limit to the fees that a lender may bill you.

 

  • Lenders usually expect home-buyers to pay a down payment of up to 20%. This can be a huge amount for those who are trying to obtain their first home. But, first time home-buyer programs often offer a smaller down payment of anywhere from nothing at all to 3%. That 17% difference on a $200,000 home converts into $34,000 less that you will have to pay as a down payment! If you have to put down 3% instead of 20% you will probably find that buying your first home is a much more obtainable goal.
  • Another advantage you will receive purchasing a home as a first time home-buyer is that loans may also feature a limit on the fees that the lender may charge. Like the reduction in down payments, this is made possible by government mortgage insurance available to new homeowners. For an annual cost, HUD (Department of Housing and Urban Development) insures your mortgage, therefore reducing the risk to the mortgage company. As a result, the mortgage company has the ability to charge lower amounts and down payments to you while still being profitable.
  • Low-income first time home-buyers may be eligible for subsidized interest programs. This means that a third party pays the interest on your loan amount. These programs can make your mortgage payments more reasonable and enable you to pay off the loan more quickly. While the government is one of the most common subsidizers of loans, they can also be subsidized by charities, organizations, or even individuals.

 

Loans for first time buyers are traditionally available only to those who are going to reside in the home they purchase as their main place of residence. The home will also have to be in good condition with no safety hazards present. And for the reason that these products are intended for those in need, there is a limit on the amount of the home you can buy through these programs.

There are a lot of programs to take advantage of and assist you as a first time home-buyer. These programs are all designed to helping you reach your goal of purchasing a home. First time home ownership has become much more obtainable with programs like lowered down payments and subsidized interest. There are many opportunities you can take to make your dream of owning your own home a reality!

Are you in the market for a new home? Do you want to get information on all the ins-and-out of purchasing a home [http://www.homesinpasadena.org]? You will also find useful articles on real estate topics such as selling your home, house mortgages, and finding a realtor. Stop by Homes In Pasadena [http://www.homesinpasadena.org] today!

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Top 10 Mistakes Home Buyers Make When Buying a New Home

House hunting without getting pre-approved

Many home buyers confuse pre-approval with pre-qualification. None of your information is verified during the pre-qualification process (which usually amounts to just a phone call between you and your mortgage broker). During the pre-approval process, your financial information is verified, your credit is pulled, and your application is reviewed by a lender. Many home buyers go house hunting in the $300,000 price range only to find out later that they are only qualified for $250,000. Pre-approval allows home buyers to shop with confidence. Sellers’ real estate agents are also skeptical when it comes to offers from buyers who are not pre-approved. Understandably, they don’t want to take the house off the market only to have the deal fall through when the buyer is unable to qualify for financing. If you want the seller to take your offer seriously, get pre-approved and submit your pre-approval letter with your offer. This one tactic could give you the edge when it comes to competing offers.

Failure to buy owner’s title insurance

Title insurance provides protection if it is later discovered that the title is imperfect. If a title dispute does arise, a homeowner who has a title insurance policy is protected. Borrowers are required by lenders to purchase title insurance that benefits the lender (to cover the loan amount), but it’s up to the borrower whether or not to purchase owner’s title insurance. Owner’s title insurance protects the homeowner’s equity in the home. If a title dispute arises and a homeowner is without title insurance, it can get really ugly. Some homeowners lose all equity in the home, the home itself and last but not least-they are still on the hook for the balance of the loan! Unfortunately, some borrowers wind up paying a mortgage on a home that they no longer own because they failed to purchase owner’s title insurance. The good news is that owner’s title insurance is relatively cheap ($200 is in the ballpark), and it is only paid once at closing.

Failure to review the closing documents prior to closing

Borrowers have to sign a stack of documents at closing, and many borrowers are so overwhelmed that they just sign whatever is put in front of them. Unfortunately, many borrowers are shocked at the closing table when they discover that the mortgage terms in the closing documents are not the terms that they originally agreed to. The best thing to do is to ask to receive the documents prior to closing. This can be arranged through your title company, and you can review the documents in the comfort of your own home a few days before the actual closing.

Not knowing your credit score

Most borrowers do not know their credit score, and some get taken advantage of by unscrupulous mortgage brokers. Now that the mortgage bubble has popped, we now know that many borrowers who were put in sub-prime loans (for people with not-so-good credit) were actually qualified for standard loans. However, these unwitting borrowers were placed in these sub-prime loans because these loans generated higher fees to mortgage companies and lenders. You can check your FICO score at www.equifax.com, and then you will know where you stand before you go mortgage shopping.

Changing jobs

Lenders seek to verify employment for the previous two years. Your income could be disqualified if you change jobs during the home loan application process. Changing jobs within the same industry with little or no downtime (30 days or less) is acceptable to most lenders. But remember that changing careers during the loan process could jeopardize your loan. Before you take a new job offer, talk to your mortgage broker to determine if the change could upset the home loan process.

Buying things on credit during the mortgage application process

Do not take out new credit during the home loan process even if you are already pre-approved. Remember that lenders can pull the plug on a loan anytime prior to the time that the funds are disbursed. Buying a new TV on a payment plan, leasing a new car, or charging furniture before closing could jeopardize your loan. Opening up new lines of credit or increasing balances on existing lines of credit is harmful to your credit score. To be on the safe side, do not make changes to your credit profile until after closing.

Choosing the Good Faith Estimate with the lowest “Total Settlement Charges”

The GFE is a one page document that provides an estimate of all charges likely to be incurred at closing. The mistake that most borrowers make is that they fail to look at the individual numbers and go straight to the “Total Estimated Settlement Charges,” which is located near the bottom of the GFE. Most of the charges on the GFE are out of the mortgage broker’s control. These include items such as title insurance, tax stamps, pest inspection, hazard insurance, and mortgage insurance as well as prepaid taxes and insurance. One common mortgage broker trick is to underestimate these charges to make the total settlement charges number look more attractive. When comparing mortgage brokers, disregard sections 1100, 1200, 1300, 900 and 1000 of the GFE. The charges in these sections are out of your mortgage broker’s control. Instead, focus on section 800 where the true differences in pricing are likely to be seen.

Too-short lock period

If your lock expires, you will be charged either the current market rate or the original lock-in rate, whichever is higher. This is standard policy with lenders. Make sure that your lock period allows sufficient time to close.

Failure to do a final walkthrough of the home

Prior to closing you and your real estate agent (if you are working with one) should do a final walkthrough of the property. Take pictures of the home at the time that you sign the purchase agreement. Bring these pictures with you when you do the walkthrough. These pictures are proof of what was inside the home. Sellers are notorious for swapping expensive appliances and fixtures with cheap replacements, doing damage to the home when they move out, and failing to complete repairs stated in the contract. To make sure everything is as it should be, do a final walkthrough so that any grievances can be addressed prior to closing.

Coming to closing with no money

Some borrowers forget to bring a check to the closing table, and their closings are unnecessarily delayed. Remember that a personal check will not do. Bring a cashier’s check to closing; otherwise your closing will be delayed.

Wade Young is a Colorado mortgage broker. His website is bursting with consumer information about credit scores and mortgages. [http://www.reddoorhomeloans.com]

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Condos vs Single Family Homes In Orange County

There is a constant debate in the real estate industry over which type of home is more valuable and preferable, the condo or the traditional home. And you know what? It’s a tough call and a highly personal choice. Both types of homes offer some great options and seem to be tailor made for certain lifestyles, and indeed each type is definitely suited to specific lifestyles. These should all be considered before the purchase of either type of home and factored into the decision to purchase.

Condos, for example tend to lend themselves towards a more active and professional lifestyle. As many condo complexes are located in urban centers that have become ideal residences for those who work and play in the city. Condos and high rises have become synonymous with city life and developers are now focusing more on building upwards rather than outwards. High rises have become part of the city landscape and builders have had to get clever about how they present their new buildings to match the evolving and discerned taste of today’s average condo buyer. Condos are also offering a number of great lifestyle choices woven into the buildings themselves, health clubs and spas are becoming commonplace in most new developments amongst other valuable additions.

Homes on the other hand have always been the traditional place where people raise families and this has not changed. The single family home has maintained it’s allure over the years and has never lost that special feeling that come with its purchase. Taking care of a home can be a bit more work than a condo but that is all part of the charm of a home, you are free to make it into your dream residence. Another thing about homes that is a good asset is the fact that your neighbors are a short distance away. It can be aggravating living in a condo or apartment with noisy neighbors. Single family homes generally have a sense of freedom to them that is hard to achieve in any kind of housing.

Both types of homes are great investments that should see nice appreciation in the coming years. Single family homes are becoming more rare as space is quickly being used up in many areas. Condos on the other hand seem to be going up everywhere around any typical city. Whichever you choose, know that you are making a long-term investment in your future.

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Buying a Home? Don’t Make These Mistakes

It’s a buyer’s market, no doubt about that. Inventory is up, sales prices are down and mortgages are more affordable than ever. However, that doesn’t mean that the road to homeownership is completely free of potholes. There are still some very common mistakes that many homebuyers – especially first-time homebuyers – may find themselves making.

1. Judging a House By Its Cover

When choosing a new home you have to be willing to look beyond the surface. The market right now is filled with older homes and bank-owned properties that may not have been kept up well. It’s easy to fall in love with some of these homes on first sight, but they may be hiding serious problems below the surface. It’s always best to know about these problems ahead of time so you know what you’re getting into and how much this new house might actually cost you in the long run. Don’t skimp on the home inspections.

2. Location, Location and That Third Thing Too

Of course, the house itself is the most important factor when it comes to choosing a new home, but you should also take a close look at the location that you’re moving into. How is the neighborhood? That house may not be worth it when you realize you’ll have to deal with noisy (or nosy!) neighbors or a power-mad homeowner’s association. It may not be worth it when realize that your new home comes complete with a long commute to the office, or even just to the grocery store. It may not be worth it if it’s in an area of town where you’re afraid to leave your car in the driveway at night because it might be stolen by the time you wake up in the morning.

The house itself is only a part of what you’re purchasing. Make sure you really get to know the area before you buy into it. Drive the neighborhood at different times of day. Test out the commute to and from work a few times. Eat at one of the neighborhood restaurants. You want to be happy with every part of your new home.

3. Not Knowing What You Can Afford

Many buyers just don’t do their homework before they start looking for a home. Some do a limited amount of homework, using websites and online calculators to determine what they think they can afford. But few do the real amount of homework that should be required. Calculators can give you some decent numbers some of the time, but they can’t predict how a lender will react to your loan request. Most banks have tightened up their requirements in recent years, making it a bit trickier to qualify for a home loan. It’s best to go straight to a lender or mortgage broker and ask them to help you determine exactly what you will be able to afford. Then, armed with those real and realistic numbers, you can begin your search for a new home.

4. Making Unrealistic Offers

Everyone’s heard the stories by now – sellers are so desperate to sell their homes they’ll gratefully take any ridiculous offer that is thrown their way! Obviously, that’s an exaggeration, but many home buyers take this attitude when they start looking for homes. Even if a house has been on the market for months, giving the seller a severely low offer, or making unreasonable demands, will be more likely to insult them than to earn their gratitude. And nice homes in nice neighborhoods – especially those that have just come on the market – will still often get multiple offers. Don’t try to unfairly take advantage of sellers in difficult positions, it has a good chance of backfiring on you. Stick to reasonable offers and you’re still bound to find a good deal.

5. Skipping the Agent

Many buyers now think that because so many websites offer so much information on current listings, they no longer need an agent to help them find a house. Of course, that part may be true. With the prevalence of good internet searches, it is entirely possible to find the home you’re looking for all by yourself. But what about the rest of the process? Handling the intricacies and irritations of financing, making offers, getting home inspections, setting up showings, dealing with seller’s agents and every other important aspect of buying a home is usually far more than a buyer is able to handle on their own. Hiring an agent to act on your behalf helps to guarantee that everything gets done right the first time.

But don’t just hire an agent based on a fancy website or a bus stop bench advertisement. Ask around to friends and family, go online and look up recommendations and testimonials. Find someone who is recommended by someone else you trust before you decide.

When buying a home, take your time and try to be smart about everything you do. With patience, determination and, hopefully, a little bit of professional advice, you’ll do just fine.

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Never Buy a Rent-To-Own-Home Without Considering These 5 Things

Are you are looking into the idea of Rent to Buy homes (also known as lease to own)? How would you like to have a road map to help you find your way? These 5 tips will get you started but, you will need many more questions answered. You can find more tips on the authors site. Do a rent to own at your own risk without consulting the list below!

Consider This….

  1. Location, location, location. The old axiom applies to Rent to Own as it would with any other purchase of real estate. Ask yourself, would I want to raise my children here? If the answer is yes, on to step 2.
  2. If you can get a loan/mortgage and purchase the home outright, you may be better off doing so.If you think you may need to move within 2 or 3 years, Rent to own might be a better option even if you can get a mortgage now.
  3. A Lease to Own/Rent to own is similar to “living together before you get married”. You might find out the other is a perfect fit. Or, you might find out the house has some really nasty habits! Either way, you haven’t made a life altering commitment. And, if you want to, you can take the plunge get a mortgage and make the commitment to own.
  4. Make sure all the terms of the agreement to Lease to Own/Rent to buy are spelled out in writing. This one seems obvious but many people just don’t do this. It’s difficult to be dispassionate about something you really want. Be sure and have someone other than yourself, preferably a real estate attorney, look it over and explains the terms to you. You can call any title company and they will have an attorney on staff who can do this for a very small fee. Do this and you may save yourself finding out some huge, costly, surprise later.
  5. Want to take the risk out of option to purchase? The option to purchase is the agreement that says you can (but don’t have to) buy the home for a specific price for a specific length of time; 1 year 2 year, etc. In a market where home prices are going up fast, less risk for you if you lock in a price in your option to purchase. In a market where prices are flat or falling (like now 2008) you have less risk if you don’t lock in the price. How do you do that? Ask the seller to put in where the purchase price goes in the Option this; “Price will be determined by a mutually agreed upon appraisal at time of executing Purchase Option”. This will mean you get a fair price when your ready to buy and so does the seller!

Other questions you will want to explore; is rent to own right for me? Why? Is now a good time to move? Want to learn more about Rent to Own/Lease to Own? Search the Internet or stop by the authors site and get the information you need to decide if it’s right for you.

Mark Brosius invites you to learn about rent-to-own home ownership and get on our list of available properties for the Metro Indianapolis Indiana area. [http://theindyhome.com]

(c) Copyright – Mark Brosius and theindyweb.com. All Rights Reserved Worldwide.

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Home Buying Tips – Avoiding The 5 Most Dreadful Pitfalls

Home buying or selling can always be stressful – even in the best of circumstances. And the worst part is, something that might break the deal always seems to happen in the final part. A home buying deal can be successfully closed, and this article here tends to explain five very important points that you could use to your help during a property transaction.

Home buying tips:

• Results of home inspection – The home purchase contracts of today usually include a contingency clause which permits the buyer to evaluate the property that he or she is about to buy. People usually hire a home inspector to do the job. The job of the home inspector is to very keenly observe and evaluate the home and then report the findings to the prospective buyer. However, the findings and reports are only shown to the hiring party.

The check usually involves anything that is harmful to the property and can eventually lower the price of the house. It is, therefore, recommended that if you are a seller who wishes to sell your house, you should first contact a home inspector and then have the inspection done yourself. This will let you know the weak points that you should be careful about. This even gives you a chance of running repairs, if possible.

• Stubborn sellers – This may happen sometimes. Even after you have brought to the notice of the findings that could lower the price of the property, some sellers do not agree to do so. In most of the cases, this is a deal breaker. There are sellers who already have a fixed figure in mind when they decide to sell their house. For example, someone might think that he or she will not sell the house for a price lower than $X because they either require the money to move to the next property, or just need to clear the amount. Being stubborn even after knowing the weak points in the sale usually results in no sale at all.

• Post-inspection appraisal – This does not happen all the time, but there are chances of this type of bump in some occasional deals. A prospective home buyer can come across this deal-breaking bump after the inspection of the house. How serious this will be is again on the decisive point of the home buyer.

• Financial fumbles – A very important factor, and usually one of the most popular. This may be caused by sudden unemployment, decreased value of stocks that could have been designed for the down payment, or cut of overtime hours. No matter what it is, it could finally result in becoming a deal breaker. It is therefore very important to sit with a consultant and plan the budget before the purchase of a house is made. Things are cheaper when you rent, and they become expensive when you buy them. This is especially true when buying a house, since the cost of maintenance and repairs are added up.

• Legal loopholes – Hiring an attorney for property transactions is highly recommended. There are legal loopholes that may require you to spend a lot of time, money and also energy. Additionally, legal processes can be very stressful. One should always hire an attorney to see the legalities are completed in any transaction.

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