The home of your dreams

All right, you are pre approved, you are having a blast with the Realtor you chose, now it is time to consider some additional questions you might want to ask yourself in order to find the proper home that suits your needs.

First off, leave the busy work to your agent, that's what he gets paid paid for. Make sure you use your agents expertise to the fullest extend. He has access to resources that might not be available to you. Well, let me take that back, he has access to the same resources you have access to but it is easier, faster and much more convenient to have him do the research and answer your questions.

Most Agents will provide you with a list of questions that are similar to the ones following in this blog. It is really a good idea to go through the motions and answser all questions on the list. Always remember, you are about to make a major investment that could potentially have a negative impact on your lifestyle if you are not buying what suits your needs.

I found some really helpful home buyers cheklists on the following webbpages:

Hud, boring but efficient:

http://www.hud.gov/buying/checklist.pdf

For Sale by Owner, good for a comparison of different properties:

http://www.hud.gov/buying/checklist.pdf

Coldwell Banker, probably the best one stop shop and resource tool I have seen:

http://www.coldwellbankeronline.com/buy-your-home/home-buying-checklist.aspx

In our next blog post we'll talk about the decision making process.

First time Homebuyers - time to find a real estate agent

OK, first off, let me say "Great Job" ... You have straightened out your finances, know what you can afford and have set yourself up for a great, successful financial future. You are about to take another key step in the process of finding the home of your dreams.

Let's talk briefly about the process of searching for a home. Controversially to a lot of home buyers opinion, fining the right home does not need to be a strenuous, lengthy process. Key is a knowledgeable Real Agent, someone you can work with, someone that has your best interest in mind.

Fact: Using a Buyers Agent will not cost you a dime but protect you and your transaction throughout the process. If you are on a relocation program, chances are you can choose your agent, don't rely on who they assign to you, do your own research.

Now, should you choose a friend or family member over a highly regarded industry professional because they can look up homes for you just as well as any other agent does?

-NO-

You want to work with someone that sits down with you, finds out what your needs are and puts together an unbiased analysis! Chances are a friend or family member will not consult you objectively because they are emotionally involved with you. They don't want to hurt your feelings if you are looking at a home that might not be a good deal and you might get stuck with a home you won't keep in the long run.

Go to the site of the National association of Realtors (http://www.nar.com/) and research your market.

Sometimes it's a good idea to go with a new new Agent, they are hungry for business and don't have a large amount of clients, hence they will be able to spend more time with you.

If you need help choosing the correct agent, no matter where you are in the country, send me an e-mail, I'd be glad to suggest industry professionals that won't disappoint you.

First Time Home Buyer, how to choose the correct financing ...

... All right, so now that your credit has checked out and you are knowledgeable on what the current interest rates are, it's time to talk about what the right financing for you could look like. I would like to stress that talking to a lending professional is highly advisable at this point in time since financing terms and options change rapidly. With that said, here are some of the most common loan programs:

Conventional and Government Loan:

FHA - loan:

The Federal Housing Administration (FHA) falls under HUD (Department of Housing and development) and offers loan programs that have lower down payment requirements and are easier to qualify for than conventional loans. If this is your first home it might be worth looking into.

VA Loans:

Similar to the FHA, VA is another government agency backed loan with low down payment requirements (sometimes no downpayment is required) and they are easy to qualify for if you are eligible. These loans are backed by the department of veterans affairs, if you are a vetaran, definitely look into this option.

Conforming Loans:

Loans that follow rules and guidelines set forth by Fannie Mae and Freddie Mac (see link on the bottom of this page for more information)

Non Conforming Loans:

Loans that don't abide by Fannie Mae and Freedie Mac rules.

Fixed rate mortgages:

Generally availabe in 40,30,25,20,15 and 10 year time frames, these mortgages feature fixed rates that stay the same over time and are calculated to pay off your mortgage balance in the agreed timeframe.

Interest Only Loans:

Generally interest only loans are set up for 2,3 or 5 years and end with a baloon payment. purpuse of these loans is to allow you to pay only interest for the first couple of years, to then refinance and start paying on the actual mortgage balance. Be careful with these loans, it is tempting to live in a home you cannot afford but it will catch up with you once the baloon payment is due and you have to refinance.

I suggest the following link to further investigate other alternatives:

http://mortgage-x.com/library/loans.htm

And lastly, please speak to your mortgage professional to get a solid financial evaluation, it will be in your best interest! Get Pre Qualified!

First time Homebuyer step 2 ...

... have you checked your credit reports with all three agencies and straigtened out out all outstanding issues ? Perfect, that means you are ready to move along in the process and take the second most important step -to get pre qualified-. What does it mean to get pre qualified? Well, in simple terms, find yourself a lender (bank, credit union, etc. ...) That would help you finance the home of your dreams.  Before you do so, make sure to do your due dilligence, there is nothing wrong with shopping around and at the end of the day you want to make sure that you make a solid business decision. Finding the right lender can speed up the closing process once you get into the closing stage of purchasing the home, going with the wrong lender can open a biiiiig can of worms and your transaction might be in jeopardy. As much as we like to see the pretty online ads that promise us low closing costs or "no fees" at all, don't discount the relationships you have built with lending institutions over years and years of banking with them. Sometimes it is better and safer to choose a lender you know, someone that is only an arms length away when you have to go through the lending process, someone that can answer questions when they come up, someone you trust. Now, as I said, your local lenders will most likely match quotes you get from an online institution and you have about two weeks to shop around without damaging credit when applying with different lenders. With that said try the following links to get a good idea of current mortgage rates and offers you are eligible for and then make your move and pick the lender of your choice.

Mortgage Rates:

http://www.bankrate.com/

Get Pre Qualified:

http://www.quickenloans.com/

http://www.lendingtree.com/

http://www.eloan.com/

Tomorrow we'll talk about the different loan types that are currently available and how why they might suit your needs.

Buying a home? Here is step one ...

... good, you made up your mind and decided that renting is not for you? Congratulations! You have taken the first step to financial freedom, you are about to become more independant and you will ultimately own a part of this country!

Now let's talk about what your first step needs to be in order to make this a big success story for you. Certain decisions thoughout the home buying process will have a big impact on your life once the transaction has closed. The biggest one is going to be your monthly mortgage payment. In order to figure out what your mortgage payment is going to be several wild cards have to be considered: Home value, Financing terms and your Credit Score. In order to allow you to get the best deal I want to make sure we start you off on the right foot. Don't start shopping for a home before you are certain of what you can afford. You do not want to find your dream home and come to find out that you cannot afford it because you are short a couple of points on your credit score.

With that being said, your first step, even before contacting a loan officer to get pre qualified is to get all three credit scores pulled. Here are some links to get this achieved in an efficent manner:

Let me save you some money first, you are eligible to get your credit score from all 3 institutions once a year without charge. Follow this link to the Federal Trade Comission if you want to learn more about your free annual credit report:

http://www.ftc.gov/bcp/edu/microsites/freereports/index.shtml

After pulling your free credit report, make sure that all information on the report is correct. If you find information on the report that is incorrect, make sure to take corrective action immediately. All three credit reporting agencies have different procedures when it comes to correcting false information. Some can be rectified online, some by phone and some has to be mailed in.

If you don't mind spending the money you can also sign up for a paid service like the one's beneath and get a triple credit report that gives you all information at once. To save time, this might be a viable option. Here are some options for you:

http://www.truecredit.com/

https://www.identityiq.com/

http://www.credit.com/

http://www.freecreditscore.com/

http://www.identitylookout.com/

http://scoredirect.com/

First Time Homebuyers - Rent or buy

Should you buy or rent ?!?

There really is no easy answer to this question, yet there are certain pro's to consider. Buying a home means making an investment. As it is the case with any investment, the question you have to ask yourself is "are you in it for the long haul or not". If you answered this question with yes, purchasing a residence might be the right choice for you. If you are looking to make a quick buck, there might be other, better solutions, but real estate can still be a viable option. Let's take a look what the advantages of purchasing a home are ...

1.) You will get to deduct your mortgage interest as well as certain closing fees from your taxes at the end of the year. If you rent, the only one that gets a tax deduction is your landlord.
2.) Your mortgage pays for principle and interest, the principle lowers your mortgage balance and you ultimately own your home. Your rent payment essentially does the same thing, just not for you. You actually make your landlords mortgage payment and help him own the building you lease from him.
3.) The value of your home will go up over time, so even considering the fact that you are paying interest on your loan, your investment will ultimately pay off. Again, if you choose to rent you are making one person happy, "your landloard" ...

Should you rent or buy? Only you can answer this question! The best starting point is probably your pocket book, check your credit, check your finances and find out what you can potentially afford and what that would cost you per month. Take that number, compare it to your current rent payment and decide if the benefit of owning vs renting is worth it for you.

Also check out:
http://www.hud.gov/buying/comq.cfm