How to Qualify to Buy Your First Home in Today’s Market
Originally posted 2010-01-06 13:46:28. Republished by Blog Post Promoter
The mortgage arena has changes a lot in the last two years, but there are tips that will help you
achieve the American Dream of homeownership.
- Learn the terms for both mortgages and real estate
- Understand the cost involved in getting a mortgage
- Check your credit before applying for the mortgage
- Discuss with your spouse, mortgage professional, and Realtor how much home you can afford
- Select the right mortgage
- Ask questions about the mortgage and its terms
- Get a pre-approval letter before looking at the first house
- Submit all required documents so that the pre-approval can become a pre-qualification
- DO NOT APPLY FOR NEW CREDIT DURING THE PURCHASING PROCESS FOR YOUR HOME
Learn the terms for both mortgages and real estate
To get up to speed on the terms for both mortgages and real estate attend the several free first time home buyer seminars given at various non-for profit organizations, mortgage companies, and real estate companies. Most companies advertise such classes in the spring of the year so keep your eyes out for the information.
Understand the cost involved in getting a mortgage
In today’s market you will need at least ten percent down payment, $350 to $450 for an appraisal, $250 to $350 for a home inspection, $1250 to $2500 for closing cost.
The down payment amount will be determine by how much the purchase is for the home. For example, if you would like to purchase a home that is on the market for $100,000 then be prepared to have $10,000 down payment. Remember, the price of any home is negoitable. You may not need all $10,000, but be prepared if you do.
The appraisal is utilized to determine the value of the home.
The home inspection is utilized to tell you the condition of the home.
Check your credit before applying for the mortgage
This can not be stressed enough know your credit score. You now need to have 620 to qualify for a FHA loan.
Discuss with your spouse, mortgage professional, and Realtor how much home you can afford
Know how much home you can afford means evaluate your household expenses and use this rule of thumb if you are comfortable paying a certain amount for rent that may be what you are comfortable paying for a mortgage. For instance, if you are comfortable paying $800 a month for rent and afford your utilities, credit cards, car payment, tuition, etc then that is the payment amount you need to apply for.
Select the right mortgage
Once again understanding of the terms will help with this decision. Make sure you understand the difference between fixed rate and adjustable rate, interest only and amorization before you sign on the dotted line. Key point, know what your payment will be in all situation of the loan.
Ask questions about the mortgage and its terms
Do research. Explore the internet and write down questions and terms you do not understand. Key point, if the mortgage professional does not know the answer or avoid the question it may not be the best product for you and maybe you need to consider a new mortgage professional that will take the time to explain things to you.
Get a pre-approval letter before looking at the first house
The pre-approval letter helps you and your Realtor know what you can afford.
DO NOT APPLY FOR NEW CREDIT DURING THE PURCHASING PROCESS FOR YOUR HOME
During the buying process do not apply for new credit. New credit is looking at by the lender as possible credit/money to spend that will keep you from meeting your obligations to pay the loan back. Therefore, do not apply for any new credit.
Related articles on mortgages
- Struggling? Here Are 10 Steps To A New Home or Just a New Mortgage Payment (deniseleeporter.net)
- Negative Amortization to the Rescue (agentgenius.com)
- Home buyers finding it as difficult to get a mortgage (telegraph.co.uk)
