If you're thinking seriously about buying a home, you've made a wise choice. Congratulations! But don't stop there; following the "10 Steps" listed below will get you started on the right foot.
Resist the temptation to take short-cuts, to cut in line or to jimmy the lock so-to-speak on the following suggestions. You'll achieve a much better result if you take your time and do it right the first time.
Here's The 10 Steps You Should Take If You're A First Time Home buyer:
1. Get Knowledge
The first step to shopping for a home - is to shop for a home buying knowledge. Yes, your first step should be education. Read books on buying a home, read your local newspapers real estate section. In fact, read the newspapers of surrounding areas too. This will give you a well-rounded knowledge of home values. You should take one of the many free first-time home buyers courses offered in your area or online.
2. Get Familiar With Lending Terms
The best approach to buying a home with fewest financial surprises is to learn the basics of home financing. Find out how and where to get financial support and information. And understand all the costs involved with financing a home besides the sales price. Go to the Google search engine and type in lending terms and study them.
3. Get Copies Of Your Credit Report
It's also important to review your credit report. Make sure the information in your credit report is accurate. By reviewing your credit report now, you'll have the opportunity to correct any errors before you look for a lender. It's much better for you to find the mistakes before a potential lender does. Don't you think?
Note: Whether you have credit problems or not, review your credit report for accuracy and completeness before you apply for a loan. To order a copy of your credit report contact:
Equifax - (800)665-1111 (www.equifax.com)
TransUnion - (800)888-4213 (www.transunion.com)
Experian - (800)397-3743 (www.experian.com)
Remember by law you're entitled to a least one free credit report each year.
4. Comparison Shop For A Lender
Make sure you compare all the cost involved in getting a mortgage, not just the ones the lender chooses to give you. Taking the time to shop, compare and negotiate will save you thousands of dollars.
Be sure you're comparing apples with apples. Ask each lender about interest rates and monthly payment. But please don't stop there. You should also ask about ...
1. Type of loan -
2. Annual Percentage Rate (APR) - Includes points and other fees calculated as a yearly rate.
3. Points - Ask for points to be quoted in dollar amounts instead of the number, so you can know the amount in dollars you'll have to pay. Force them to keep it simple.
4. Other Fees - These can include loan origination fees, broker fees, settlement cost, recording fees, closing cost and other fees.
Note: Ask for an explanation of any fees you don't understand.
Other questions you should ask each lender ...
1. Do they offer any special programs for the first time home buyers?
2. What are the requirements?
3. What are the down payment requirements?
Use a "Mortgage Shopping Worksheet" like the one on the bottom link. Print it out and take it with you when questioning lenders. Using this worksheet will get you instant respect from lenders. Most people approach lenders with a "can you give me a loan attitude." Using a Mortgage worksheet encourages them to earn your business and makes you look more organized and a smarter shopper. To get free copy Click Here!
5. Get Pre-Qualified
By getting pre-qualified you'll not only know your exact housing budget - you'll have more negotiating power. Why? Because the seller knows you've already taken serious steps toward getting the loan.
Pre-qualification is a preliminary loan application step. The lender uses your credit, income, assets and debts to arrive at an estimate of how much mortgage you can afford.
6. Get Pre-Approved
Preapproval is a step above pre-qualification. Here the lender contacts your employer, your bank and others to verify your income, assets, debts and credit history. Next, they issue you a letter stating your mortgage approval for a specific amount within a certain time frame. You may be charged a small fee to cover the cost of your credit reports and your application, which is often refunded at closing.
By getting pre-qualified and pre-approved you become much more attractive to sellers and it makes your real estate agents job much easier. Plus you'll save time when you find a home, because the lender will have already completed the necessary qualifying and underwriting steps. It could make the difference between getting that good deal or missing it.
7. Decide What Your Needs Are - And Your Must Haves
Ask yourself these questions:
8. Shop For A Real Estate Agent
Here's some questions you should ask when interviewing real estate agents. Having the answers to these questions can help you make the most intelligent decision:
1. Do you work in real estate full or part-time?
2. Do You belong to the multiple-listing service where I want to buy?
3. How many buyers have you helped to buy a home in the past year? How many in the area I want to buy in?
4. How familiar are you with the homes for sale in my preferred area?
5. What exactly would you do to help me find and buy a home that will meet my needs?
Remember to be up-front and honest about your needs and wants. Pay attention to whether the agent listens to you. Does he or she seem to know what they are talking about? Would you feel comfortable working with them? Do they appear comfortable answering the above questions?
9. Make It Easy For Your Real Estate Agent To Help You
After you've picked a real estate agent to work with, make it easy for them to help you find the right home.
This means expressing your honest needs and must haves to your agent. This means being on time for all appointments and showings. And this means calling ahead if you're running late. Plus communicating what you like and don't like to your agent after each house showing. This way the agent won't waste your time and his showing you homes you don't want or can't afford.
10. Put Down A Good Faith Deposit When You Find A Home You Like
This deposit assures the seller you're serious in buying their home by backing your offer with money. A good faith deposit can vary between 1% and 10% of the sales price depending on the market and can go toward the down payment or other buyer closing fees.
Note: Before you settle the deal make sure you do the following ...
1. Once you've decided on a house or neighborhood, drive-by the home during the night or evening hours. You'll want to see what activities go on and around the home, street and neighborhood. Especially after all school children and residents come home.
2. Check with your local police or sheriff station and ask for a list of all calls dispatched within a 2 mile radius of the home you plan to buy. Tell them you're thinking about buying a home in the area. Get it for at least the last 12 months. This report should list the dates and times of the calls, the addresses the police came to and the reasons for the calls.
While you're at the station check for any convicted sex or child predators withing a 2 mile radius of the home you plan to buy.
By following this 10 step list you'll enjoy two huge advantages. You'll go a long way in avoiding the frustrations, stress and bad decisions people can go through when buying a home. And you'll have more time to enjoy the benefits.
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