1. Don’t buy if you can’t stay put.
If you can’t commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner – even in a rising market. When prices are falling, it’s an even worse proposition.
2. Start by shoring up your credit.
Since you most likely will need to get a mortgage to buy a home, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.
3. Aim for buying a home you can really afford.
The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you’ll do better to use one of many calculators available on-line to get a better handle on how your income, debts, and expenses affect what you can afford.
4. If you can’t put down the usual 20 percent, you may still qualify for a loan.
There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a small down payment.
5. Buy in a district with good schools.
In most areas, this advice applies even if you don’t have school-age children. Reason: When it comes time to sell, you’ll learn that strong school districts are a top priority for many home buyers, thus helping to boost property values.
6. Get professional help.
Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent. Look for an exclusive buyer agent, if possible, who will have your interests at heart and can help you with strategies during the bidding process.
7. Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying additional points — a portion of the interest that you pay at closing — in exchange for a lower interest rate. If you stay in the house for a long time — say three to five years or more — it’s usually a better deal to take the points. The lower interest rate will save you more in the long run.
8. Before house hunting, get pre-approved.
Getting pre-approved will you save yourself the grief of looking at houses you can’t afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.
9. Do your homework before bidding.
Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that’s about eight to 10 percent lower than what the seller is asking.
10. Hire a home inspector.
Sure, your lender will require a home appraisal anyway. But that’s just the bank’s way of determining whether the house is worth the price you’ve agreed to pay. Separately, you should hire your own home inspector, preferably an engineer with experience in doing home surveys in the area where you are buying a home. His or her job will be to point out potential problems that could require costly repairs down the road. Excerpted from Money/Cnn.com
1. Figure out how much you can afford. What you can afford depends on your income, credit rating, current monthly expenses, down-payment and the interest rate.
Home Economics Home-buying programs in your state.
2. Know your rights. Fair Housing: Equal Opportunity for All- brochure Real Estate Settlement Procedures Act (RESPA) Borrower’s rights Predatory lending
3. Looking for the best mortgage. Shop & compare. Learn about different loan programs. New South Mortgage can help you select the right loan for your needs.
4. Learn about home-buying programs. Home-buying programs in your state Let New South Mortgage help you.
5. Shop for a Home Wish list. What features do you want? We compiled some essential Checklists to help you find the right home.
6. Make an offer. After you make an offer, contact us and we will assist you with the next phase of home buying: the mortgage.
7. Get a home inspection. For Your Protection Get a Home Inspection 10 Questions to ask a home inspector
8. Shop for homeowners insurance. Homeowners insurance varies a lot in this coastal area. We have some excellent suggestions for you.
9.Sign papers You’re finally ready to go to “settlement” or “closing.” Be sure to read everything before you sign! Excepted from HUD.gov
Loans insured by the Federal Housing Authority (FHA) are designed to help everyone realize the dream of owning a home. And they’re ideal for first-time home buyers! Because the FHA insures these mortgages, FHA lenders can work with borrowers who’ve had credit problems, collections, past bankruptcy filings, or debt-to-income ratios that are higher than normally allowed.
Applying for an FHA loan
Getting in touch with a specialist through MyFHA is simple. We’ve combined the speed and ease of the Internet with the hands-on help our customers expect. Once you click on-line, we enter your information into our database and begin a preliminary review. Then, we match you with the right specialist for where you are right now.
During the phone interview, your consultant will discuss with you where you are right now and help you determine your best way forward. If you don’t pre-qualify right away, your specialist will suggest ways to improve your profile, so you may become eligible in the future. Within 10 minutes, you’ll usually know if you’re ready for a mortgage. The interview is also a great chance to get acquainted with your consultant, who will play an important role in your becoming a home owner. Good communication will increase your chances of a successful and speedy process!
Processing a mortgage involves gathering documents to verify information which may include (but is not limited to) W-2 forms, two-weeks of pay stubs, credit reports, and bank statements. After your approval, you’ll receive a pre-qualification that includes a checklist specific to your file. This checklist will itemize all of the disclosures you must sign and things you must submit before receiving a final loan commitment.
Closing your FHA loan
The closing is the “end of the line” in obtaining a mortgage. At the closing, you will sign all of the required mortgage documents. If it’s a new mortgage, you’ll collect your new keys and then take possession of your new home. The professionals at New South Mortgage are happy to discuss the process with you in detail.
The first thing to understand about buying a home is that you don’t have to have all the cash saved up in order to make your purchase. There are lenders that offer loans in certain situations up to 100% percent of the purchase price of your home. Both USDA and VA will allow certain qualified borrowers to obtain 100% loans with contracts structured so the seller pays closing costs, so you can truly buy a home with no money down.
If you have a steady job and a reasonable credit history, there is a good chance that you can find a home lender who will lend you most of the purchase price of your new house. FHA lenders only require 3.5% as a down payment and can be an excellent option for those with only a small amount to put down. They even allow the 3.5% down payment to be a gift from a family member.
Conventional; Fannie Mae loans typically are offered up to 95% of the price you are paying for the house, but you may be required to pay monthly mortgage insurance similar to FHA. Fannie has even recently offered a 97% loan that only requires a 3% down payment for first-time homebuyers.
The professionals at New South Mortgage are happy to discuss your situation in detail and help you determine the best way to structure your own home loan.
We know you have a lot to get down.
To assist you in making the right decisions,
we compiled a series of Checklists we hope you find helpful.