or what you need to know
to get you started toward buying your 1st home!
People fear what they don't understand. A good example is the purchase of a home. The average consumer knows very little regarding the home buying process. Between finding the right house, making sure it won't fall apart the day after it is purchased, and finding the best financing, it is no wonder that so many people are afraid to purchase homes.
Buying a home is one of the most important financial decisions an individual will make. For a first-time homebuyer, the decision to purchase a home can be daunting. It will represent a major step forward as the individual/family will be assuming potentially its largest responsibility. As with any major decision, it is important that everyone, especially first-time homebuyers, take full advantage of the information and training that is available to more clearly understand the home buying process.
To prepare, you should do research and be fully informed before beginning the search for a dream home. Here are six steps to get started:
1. Before you start your house search, think carefully about what it will be like to be a homeowner. For most people, homeownership is an integral part of the American dream. That is not even to mention that the advantages (tax benefits, pride of homeownership, financial investment) far outweigh any drawbacks.
2. Your credit history is one of the first things a lender will look at in making a decision on your loan. Contact one of the three major credit-reporting agencies to obtain a credit report. Review it carefully to be sure all the information is correct. If you find discrepancies, you should work with the credit agencies to resolve them.
3. Saving for a down payment can be one of the biggest barriers to homeownership. Mortgage lenders recognize this dilemma and many now offer low down payment loans. Three and five percent down payments are commonly available, and there are some loans that require no down payment.
4. Before you begin working with a Realtor®, first go to your local lender and ask them to pre-approve (not prequalify) you for a mortgage. Most lenders will provide this service free of charge. Pre-approval will let you know exactly how much you can spend on a home purchase BEFORE you start your search. A preapproval in hand also makes you a more attractive buyer when you are ready to make an offer on a home. Home sellers are more likely to accept an offer from a buyer who can demonstrate the ability to secure financing.
5. Many cities and counties offer down payment assistance programs for borrowers meeting certain eligibility requirements. Investigate these by calling your local housing department. You may also want to check with your mortgage lender and possibly local nonprofit housing organizations as well, to see if there are assistance programs in your area. Down payment assistance programs may take the form of "silent seconds," which are loans you take in addition to your mortgage to help make the down payment. Many times, silent second loans will have below market interest rates, and in some cases might not require payments until you sell your home. As an alternative, some local housing departments offer low interest rate loans for the entire mortgage, sometimes a full point below market interest rates.
6. Many mortgage lenders, nonprofits, and even Realtors offer homebuyer education classes to prepare you for homeownership. Classes normally run about four hours and cover the basics of home buying. Some of the topics covered are how to apply for a loan, work with a Realtor, make an offer on a home, the escrow process, and the responsibilities of homeownership.
For more information or for a free pre-approval, please call Louis at 708-243-1915. Email LVELA@PMFMTG.COM
More people who are renters now qualify to become a homeowner. Don't let fear or ignorance stand in your way. Our job is to educate and advise you. Call us today to take one step closer toward realizing your dream of one day becoming a homeowner.
Sincerely,
Louis Vela