Posts Tagged ‘Buying A Home’

The attraction of buying a home is that it gives you use of your investment whilst you are paying it off and over time the equity in your home will increase.  To realize this equity of course you either have to sell your home or take out a home equity loan. Buying a home is a very expensive decision to make and you need to take into consideration all of the factors you know today, such as interest rates, income and fixed expenses. In addition to this you need to also predict your home affordability into the future if interest rates rise and you have more  fixed expenses, such as children. It is very easy to think that you can afford a home that costs you more than you can afford.  Remember your dream can quickly become a nightmare if you do not consider your real financial capacity to afford the home.

In your regular repayments for your home, it is quite common you have three individual payments rolled into one payment.  These repayments are for the mortgage, the property taxes and the insurance.  The mortgage is your standard principal plus interest (or interest only if you took out that an interest only loan). The property taxes are usually levied by your local government over the building value and the land value. The property tax is a standard annual tax, however you do have the choice of paying this each time you make a home payment (a lot of people pay monthly).  The third payment is your home insurance payment, which is also called hazard insurance. This insurance is to cover the loss of your home nor if it was partially damaged.

This is usually mandatory insurance as it protects the lender in reclaiming their money if your home was destroyed or partially damaged.  Naturally all of these payments could rise over time and it is important that you will have the income to cover any such rises. In the recent credit crisis foreclosures increased by over 60% in February 2008 over the previous February 2007.

A common marker to determine if you can afford a home is that 30% of your income is needed to repay the loan each repayment period. If the percentage to repay your loan is higher than this,  you will find it difficult to repay this amount unless you are a high income earner and you can easily afford the  repayment.

Buying a home is one of the most important decisions that most people will make in their lives. It’s likely to be the most expensive asset that most people will ever purchase. With the average home costing the equivalent of several years’ salary, it’s very rare that anyone can save enough money to pay for their residence with savings. The only option that most people have when they’re ready to buy a house is to borrow money in order to pay for it. A loan that is taken out in order to buy a home is known as a residential mortgage. If you’re planning to buy a home, it’s important to understand what a mortgage is and how it works.

A mortgage is a secured loan.

There are two basic kinds of loans – unsecured and secured. An unsecured loan is money that is lent without any sort of collateral, simply on the good credit of the borrower and their promise to repay it. If the borrower defaults on the loan (fails to make the required payments), the only way for the lender to get its money back is to sue the borrower in court. A secured loan is one where the borrower guarantees payment by putting up collateral. If the borrower fails to make the payments as promised, the bank or lending company has the right to take possession of the collateral and sell it to recover their money.

A mortgage is a secured loan in which the house serves as collateral. When you take out a mortgage on a home, you sign a mortgage note that essentially gives the bank partial ownership of the house. Until you make the final payment on your mortgage, the bank or lending company has the right to foreclose on your home if you fail to make the scheduled payments on your loan. That means that they can take possession of your house and sell it to recover any money that’s still owed to them on the loan.

The mortgage rate is the interest that you pay on your loan.

When you borrow money, the bank charges interest on the money lent to you. The interest is expressed as a percentage of the amount that you borrow multiplied by the length of time you take to pay it back. The length of time that it takes you to pay back the loan is called the term of the loan. Most lenders offer mortgages for terms of twenty years, thirty years or forty years. Some lenders offer mortgages for as short a term as ten years, and the most common term for a mortgage is thirty years.

There are many different kinds of residential mortgages. The best known are fixed rate mortgages (FRM) and adjustable rate mortgages (ARM). They are exactly what the names say. If you take out a fixed rate mortgage, your interest rate is guaranteed to stay the same for the life of the loan. If your mortgage rate at signing is 6.25%, it will remain 6.25% until the entire mortgage is paid off. An adjustable rate mortgage is one where the mortgage rate can change based on an index of some sort. If that index goes up, your interest rate goes up. If it drops, the interest rate drops.

There are advantages and disadvantages to both kinds of mortgages. Because a fixed rate mortgage offers a guarantee against interest rate increases, the interest rate usually starts out higher than the mortgage rate for an ARM for the same amount and term. An ARM will spell out specific conditions under which the interest rate can be changed. Generally, the rate is reconsidered every three, six or twelve months. Some ARMs have low initial rates that are guaranteed for a specific period of time – generally two to five years. After the initial period, the interest rate is subject to adjustment according to a specified schedule.

Mortgages carry other costs and fees in addition to the interest charged.

In addition to the interest, most loans also have other costs and fees associated with them. Those costs are often payable at closing, though they are frequently financed and added to the amount of money borrowed for the mortgage. Other costs must be paid before the loan is closed. The costs may include loan origination fees, a loan broker’s fee, the cost of private mortgage insurance and legal fees. Paying those costs up front can reduce the interest rate as well as the total cost of the loan.

Buying points can reduce the interest rate and the cost of your mortgage.

There are a number of ways that you can reduce the total cost of a mortgage. One of the most common is called “buying points”. When you buy or pay for points on your mortgage, you are paying part of the interest up front. One point will cost you 1% of the face value of the loan. If you’re taking out a mortgage for $100,000, you’ll pay $1,000 a point. For each point that you pay on your mortgage, the lender will reduce the interest rate by a certain amount. The exact amount varies from lender to lender. You can find mortgage points calculators online to help you decide whether or not paying points is a good idea in your situation.

So, you’ve heard all about the amazing bargains that are up for grabs on the current property market. You’ve sat down and made some detailed calculations, and decided that now is the right time to dip your toes into the murky waters of home ownership. So, what next?

First, secure a loan. Once you have preapproval you will know exactly what you can afford, and therefore avoid wasting a lot of time looking at houses that are way outside of your budget. There are many types of mortgage and loans advisers out there, so take your time and shop around until you find the product that best suits your needs. Be patient, a hastily made decision at this stage could cost you dearly in the long run. And remember to take into account those ‘extra’ purchases, taxes, fees and so on, that are all part of buying a home. Allow yourself a comfortable safety net.

Once preapproved, take your time looking only at those homes that are priced well within your financial limitations. Knowing that you qualify for a loan, that will cover the cost of a preferred property, will help remove significant levels of stress from the whole house buying process. Both the seller and yourself will be comfortable that any offer you make is good, and a quick decision should help speed up the whole process.

Appoint a reputable real estate agent. Again, take your time here, as the level of service offered by agents can vary greatly. Most are certainly trustworthy and capable, but some will have specific strengths that may lend themselves better to your individual needs.

OK, you’ve looked at a number of properties and eventually found your dream home. After a little bit of haggling, you make an offer that gets accepted. But what comes next? How long will it take until you actually have those all important keys in your hands?

This will depend on a number of factors. The closing process can vary enormously from one state to another, and in some cases even within the same state. And there’s the matter of escrow… esc-what? Ask your agent, your attorney, your parents – do your homework, and make sure that you are well informed on the issues that inform the closing process.

However, before you proceed with any payments make sure that you instruct a qualified home inspector to make a thorough inspection. This is essential. An experienced instructor will provide you with documentation that will describe the physical condition of the property and will identify any flaws, and issues that need to be dealt with. It may be that you need to renegotiate your offer should anything significant show up.

Assuming that the home inspector’s report raises no significant problems, or any repairs that are identified are dealt with, you can then make a payment and sign those all-important documents. All you need to do now, is collect the keys from your estate agent, go buy a bottle of something cold and fizzy, and head over to your new home and start unpacking your boxes and making yourself comfortable!

One of the necessary parts of buying a home is finding a qualified home inspector to make sure that there are no major faults with the home. A home inspector examines the major components of your potential home and provides you with a report stating what condition they appear to be in. A home inspection by a qualified individual will enable you to make a good decision about buying, what offer you will submit and what conditions you will stipulate.

A home inspection includes an examination of the electrical, plumbing, heating, roofing, foundation, interior and exterior of a home. The inspector is non-invasive i.e. they do not damage the home, nor do they remove integral components of said home in the course of their inspection. This may mean that the inspector has no way of knowing if there is a budding invasion of termites, mold or carpenter ants inside the walls unless evidence shows outside them. Often, separate inspections for roof integrity and pests are recommended and even required by some jurisdictions.

Many home purchase contracts stipulate that a home inspection be completed and problems addressed to the satisfaction of the buyer before the home purchase contract is considered valid. The home inspection ensures that, short of tearing the home apart, the most in-depth evaluation of the home’s condition is made. Buyers can then use this information to determine whether the home’s condition justifies the price they are considering paying or whether they are going to change their offer or add conditions to the purchase.

The importance of the qualifications of home inspections is reflected in the recent legislation in British Columbia that requires that home inspectors meet the qualification of the province’s branch of the Canadian Association of Home & Property Inspectors, the Applied Science Technologists and Technicians of British Columbia, or the National Certification Program for Home & Property Inspectors. More provinces are likely to enact legislation like this in the near future, making it harder for unqualified individuals to conduct valid home inspections. It is imperative for the home buyer to ensure that their home inspector is a qualified professional.

While a home inspection isn’t going to guarantee that nothing goes wrong with your home, it will catch a lot of problems before they become your problems. A good home inspector will cost several hundred dollars, but when compared to the hundreds of thousands of dollars your home is likely to cost you, it is more than worth it!

We encourage our kids to plan for their future, but we seldom include buying a first home sooner than average as a path to building that future. Let them know buying a home is easier than they think.

Most of the people who read this column are not first time homebuyers. The fact of the matter is many of you that are first time homebuyers and reading this article are relatively mature individuals who are fighting off your commitment fears of being tied to a mortgage. But there is a huge segment of the population that could buy their first home, yet it doesn’t occur to them to do so. Who are these people? Well, it’s your 24 year old son or daughter, new to the work force, and is throwing away money on rent somewhere. Encouraging your children to buy a home when they are young is some of the soundest financial advice you can give them. Equity in a home is an easy way to grow one’s portfolio with very little investment. But the fact of the matter is it doesn’t occur to most of us to encourage the younger generation to buy early in their lives. And trust me, it rarely occurs to our kids themselves to consider buying a home in the early twenties. They are more concerned with buying a new Halo 3 for their Xbox.

Why do so many people miss the boat on this opportunity? It could be they plan to be in the area for only a short time because they will job hop to advance their career, thus viewing a mortgage as “too permanent.” I counter to simply sell the house when you move. Or maybe they expect their income to double or triple over the next three years. I say buy a home now, then upgrade to a new home; sell or rent the old house. Investing in real estate is a proven, safe and solid return on investment. And with the right combination of credit history (or a history of paying utilities, cable and your cell phone on time) and no money down, you or someone you care about can start investing in the future.

When Junior starts his new job at the company and 401(K) is available, he’s been informed by his folks, boss or peers to enroll and contribute at least a little something to it with every paycheck. Yet, he is rarely counseled quit renting that apartment for $750 a month and buy a $75,000 house. Where will he come up with the money to do it? There are multiple options for first time buyers that allow for 100% financing. Get the seller to kick in closing costs (up to 6% of sales price with some products), and one can close on a loan and bring no funds to the table. If your home value appreciates 4% in the next year, that’s a nice return on a no cash investment.

For some time, I’ve considered writing this series for first time buyers to let them know buying a home is easier than they think. But, the more I thought about it, the more I realized the advice I would offer would most likely not reach my target audience. So parents, it is up to you to supply your kids with this last little bit of advice and help to set them free to further establish their independence in this world. Clip this article out and tape it to their iPOD or the steering wheel of their car – someplace it will get noticed.

I think for most of us who have been through the experience, our first home buy was a very daunting experience. There are so many choices and unknowns – it can be overwhelming. In this series, I will try to break it down the process into small logical steps and make it easier understand the steps involved in financing your first home. Where do you start? That is perhaps the easiest part. Our newly established worker should first make a list of all his or her debt obligations such as student loans (unless deferred), car payments, credit card debt, etc. Hopefully at this age, this will be a small list. Then add what you think amount you could afford for a mortgage. Take that amount and divide it by your gross monthly income. If you come in at 43% or less, you’re in business. If you have something in your savings or checking – great. If not, don’t let it deter you. You have options.

Contact a mortgage specialist to drill out the details and find a good realtor who knows your market for housing you can afford. What next? Get ready to tell your landlord “Adios!.”

As everyone knows, buying a home is stressful and one of the most important decisions that one has to make is what kind of mortgage to get. Choosing the mortgage that works best for you and addresses your specific needs can potentially save -or cost you -thousands of dollars over the length of the mortgage.

Perhaps the biggest decision is whether to take a fixed rate (FRM) or an adjustable (ARM) mortgage. A fixed rate mortgage is just that -the interest rate on your loan will not change even if interest rates go up or down. An adjustable rate mortgage will go up or down, depending on the prevailing interest rate at the time. It all depends on the state of the economy, your personal and financial situation and just how much of a risk you want to take. Around 70% of all mortgages are fixed rate.

A fixed rate mortgage offers stability -you do not need to worry about your monthly payment going up, although you may be missing out on a better rate. An adjustable rate mortgage carries an interest rate that is connected to the prevailing market rate -the monthly mortgage payment will be more or less, depending on what the market rate is doing. An adjustable rate mortgage does offer some safeguard – there may be a limit on the amount the rate can change during a certain period; there may also be a limit on the amount that rates can be increased over the length of the loan.

A change in the interest rate can mean a big difference in how much you pay for your home. An interest rate of just one point less can mean a savings of around $50,000 on the average thirty-year mortgage and around $5,000 on the average 15-year mortgage. In addition, an increase in the interest rate of just one or two percent can mean monthly payments that are between $50 and $250 higher. Another option is to take out the fixed rate mortgage and then re-finance if interest rates go lower.

The length or term of the mortgage is also important. Most home buyers opt for the traditional 15 or 30 year mortgage, but it is also possible to take out a mortgage that is 10, 25 or even 40 years. It all depends on how much you can afford to pay each month and how quickly you want to own your home outright -obviously, the shorter the term of the mortgage, the higher your monthly payments are.

It is also possible to take out a 30-year mortgage and when you can afford it, pay more towards the principal, thus making the term shorter. Simply making an extra payment a month will significantly reduce the term of the mortgage -as well as saving a substantial amount in interest charges. If you pay extra, make sure the payment is going towards the principal, rather than the interest.

There are some other options available. An option adjustable rate loan has an interest rate that adjusts every month -it allows homebuyers to enjoy lower monthly payment amounts at first and then to make higher payments later, when they can better afford it. A so-called balloon mortgage offers a payment schedule similar to the traditional 30 year mortgage -but with a shorter term of up to seven years. At the end of the term, the buyer must pay the outstanding balance.

You may also be eligible for an FHA (Federal Housing Authority) loan -a fixed rate mortgage that is designed for home buyers with a low income or poor credit, who are buying a home for the first time. An FHA loan usually requires less of a down payment and offesr a lower interest rate than a regular mortgage. An FHA mortgage loan is also secured to the lender in the event of default by the purchaser.

Another option is a VA (Veteran’s Affairs) mortgage, which applies to buyers who have experience of serving in the military, as well as a surviving spouse. VA loans have several advantages – it’s possible to get a mortgage with little or no down payment, the loans are assumable and there is no penalty for prepaying the loan. However there is a maximum loan amount – in most states this is $417,000 -and you still have to qualify as far as income and credit are concerned.

Your home is probably the biggest single purchase you will make. It is worth taking the time to find the mortgage option that works best for you. The types of mortgages that are available all affect your payments differently. The type of mortgage chosen mostly depends on personal income and the length of time in which you are looking to pay for the mortgage.

Living presupposes thinking and making decisions. And that means having enough knowledge. That is what you would get after reading this article about Cheap Homes.

If you are hesitating to read this article thinking it would be a waste of time, we assure you that it would be difficult for you to find articles of the same worth on the net on Cheap Homes.

We claimed at the beginning that this article would surely prove to be different from others that you find on the net and now when you are reading this article, it is now for you to decide if we were right in our claim or not.

When it comes to real estate, it’s really hard to beat a cheap home. Cheap homes are very affordable, and ideal for those on a budget. For real estate agents, these types of homes represent a way to buy a home at a low price, build it up some more, then sale it for a large price. Making money with real estate is easy to do – no matter how you look at it.

Hasn’t this article made you aware of the fact that so much information existed on Cheap Homes and that you were unaware of even the fact that you were unaware of it?

Although you can find cheap homes throughout the United States, some will obviously be better than others. Some are in great neighborhoods, giving you plenty to see and plenty to do all around you. On the other hand, most towns that offer the cheapest homes normally have a bad situation when it comes to the job market. They can be great to retire to or settle down in if you own a business, although they aren’t great if you need a job. Internet marketers and writers are finding these areas, are flocking to them at a very fast pace.

Now when you are reading about Cheap Homes, don’t you feel amazed to know that so much existed about Cheap Homes and that you were unaware about so much?

You can also save quite a bit of money by buying a home that is less expensive, but still fits your needs. What this means, is buying a home in the inexpensive areas of your town, or buying a home that is cheap in price. You shouldn’t be focused on one type of home or neighborhood, but instead look at your available options and compare prices.

If you think that reading an article is an easy task, think again. Reading does not mean just reading without paying attention to it. If you need to gain something about Cheap Homes, do read this article with concentration.

Keep in mind that buying cheap homes doesn’t necessarily mean buying a run down place or buying your home in a bad part of town. You can get a cheap home in a great neighborhood, if you weight your options accordingly. If you shop around and look at different areas, you might find yourself very surprised at just how many homes are available at cheap prices.

Before you purchase a home, you can save a lot of money if you know how to negotiate with the real estate agent. Although a home may have a higher price than you are willing to pay, you can shave quite a bit of the price off through negotiating. If you learn just a few of the simple techniques of negotiating, you can save a lot of money. Each and every day, hundreds of people get cheap homes by negotiating with real estate agents.

In some cases, you can end up paying the full price of a home and still end up spending less than someone else might spend. Although price has an impact, financing is also an area that can help to make a home more affordable. If you get a low interest rate, you’ll save a lot of money when you buy the home. There are several ways that you can save money through your finance options, which is why you should always research what’s available to you before you buy.

Before you decide to buy a home, you should always think things through and be sure to look around different areas and neighborhoods. Even though there are many cheap homes out there, you can get just as good of a deal through negotiating. Most cheap homes sell very quick, which is why you should always be on the lookout for one. When you find a cheap home that fits your needs, you should act on it. Contact the agent, take a tour of the home, then decide if the price and the features are indeed what you’ve been looking for. If it isn’t – simply forget about the house and start looking for another one.

The main motive of this article was to provide some pertinent contents about Cheap Homes and now when you have read this article, you must agree to us about the relevance of our content.

Now that you have come to the end of Cheap Homes, I hope all the doubts

that you had have all been cleared. Wish you are satisfied!

So what does your credit have to do with buying a home? Everything. In thinking about the relationship that these two things have we must look at why it is necessary to have a good handle on your financial picture before you even think about purchasing a home. Not too many people have the luxury of simply paying cash for a home, the reality of the situation is that a mortgage of some kind is usually necessary. In order to get a mortgage or at least one that has favorable terms and a decent interest rate a person must have respectable credit. Now, living in today’s world it can be fairly easy to tarnish your credit, a missed payment or two or even sometimes things that you were not aware of can decrease your chances of getting a decent loan.

Long before you start the process of shopping for a home your should be getting ready to shop for a mortgage. The first step of this process is finding out what kind of credit picture you are dealing with and being ready to make changes if necessary. Now, if there are any items of concern on your credit report you should go ahead and get those taken care of. Outstanding debts will end up costing you in the long run so take care of them now and make sure that they get deleted from your report when they have been paid out. If your credit situation is bleak then seek some financial guidance. There are quite a few banks and institutions that can help you to repair your credit.

Once credit is no longer an issue go ahead and start shopping for a mortgage. Now this is a step that anyone should be extremely careful with. As you may have heard or seen, there are some really underhanded lenders operating in this country and they seem to like nothing more than absconding with a borrower’s money never to be seen again. So take the time to search out a lender with good standing and reputation within the community. Also check with the BBB and the Chamber Of Commerce. If a company is a member in good standing with both organizations then it is likely safe to trust them as a lender.

The last thing you will have to decide before searching for your home is what kind of mortgage to get. Be wary of deals that seem too good to be true, they often are. The standard loan is a fixed rate amortized loan for approximately 30 years but there are loans that span longer or shorter periods of time depending on your payment ability. Fixed-rate mortgages are generally the best type to get as they offer stability of payments and the interest rate does not change. With variable-rate loans if there is a sudden spike in interest rates you can find your payments climbing higher than your ability to pay. Just take the time to research all your options and don’t be afraid to ask questions!

In buying a home there are certain un-escapable things that will need to be seen to in order for the sale to finish properly. Some people try to shorten the closing time or save some money by skipping steps of the purchase process and nothing good ever comes of this. Leaving things out can lead to too many problems to list here, suffice to say that they are part of the process for a reason and should not be negated.One of the most common things that is overlooked is the inspection. Now sometimes it is the doing of the seller that this is skipped, there are those who want to sell but know that their home will not pass a proper inspection and so they downplay the necessity of the inspection. Sellers like this will sometime offer incentives to those who skip the inspection. A buyer should ask themselves “What is being hidden?”

What are some of the important things that should never be overlooked? Title Insurance is a good one to remember. It may seem like an extravagance, just one more insurance bill to pay but with the title to your new home in question you may just want to make sure that the seller has free and clear title before selling the property. We have seen too many issues involving improper title and transfer thereof, getting some Title insurance is always a good step in protecting yourself.

One thing that may people don’t think of is having their mortgage pre-approved. Many think that they will be accepted without issue, and if this were the case then sure you could hang on and not get the financing until it’s absolutely necessary. Many are shocked when some realtors ands sellers will not even deal with them until they have been pre-approved. Sellers really don’t have time to mess around while someone tries to secure funding. That is time when they could be showing the home to other prospective buyers and preparing for their own move. Having this also dictates what kind of home you will be able to afford, so there is little point in starting to shop without it.

This is intended to be a bit of a primer for the first-time home buyer. Buying a home is a huge decision and not an easy one to make the first time. The home purchase process can be fraught with pitfalls that a new buyer may never see coming, so proper planning and prep is essential. Let’s try breaking this process up into 3 parts; financial, shopping and moving. Let’s also look at each in turn and see if we can’t figure out a good set of steps to follow that can guide a new buyer to a successful home purchase.

Financial – Financially speaking this is going to be huge. Unlike anything you have ever done actually. Buying a home is something that will directly involve every last aspect of your financial life and is based entirely on your credit score. If you are unsure what yours is then now is the time to find out. There could be things affecting your score that may keep you from getting a mortgage and those will need to be cleared up immediately. Then you will need a fully pre-approved mortgage so that you can begin the second step.

Shopping – This is the fun step as you now get to go out and shop for homes. Yes, you get to be the finicky buyer!Now, be careful in your shopping, remember you will have a set amount of money to be working with and setting your standards too high may result in disappointment. Be reasonable about what you actually need. And don’t bet the whole lot on one home. This really is the fun part of the process so if you find something you like, make an offer!

Moving – It’ always best to start getting really for this step a long time beforehand as picking up an entire life and moving it any distance is time consuming and stressful and should be done with the utmost of care and planning. You will be fairly exhausted at this point but you may find that you are simply running on excitement, especially as the possession date grows closer. Pack by room and this will make it easier to set things up in the new home.

This list is pretty basic but it is something that you can use as the basis for a strong and informed home purchase. Make any changes to the process that you feel necessary after all this is your life and future that are on the line. As you go you can refine and change the list to suit your needs, just remember that this is a process with aspects that will not change.

Buying a home or Denver real estate (including securing a mortgage) can be a very difficult process, particularly if you are a first-time buyer. In order to help you make property acquisition as painless as possible, you may want to follow the steps laid down by seasoned real estate investors. Read on.

Step # 1: Look For a Real Estate Agent

If you think that buying a property is as easy as ABC, then you are gravely mistaken. It is a complicated process and there is a substantial amount of paperwork, taxes, and other details that average people would not be able to handle properly. So the first thing you have to do is to look for a real estate agent who can help you with your needs. Just make sure that the agent you hire has a proven track record and is dependable. Sometimes it also pays to find someone who has a good understanding of mortgage procedures so she can also help you out with your home loan application and other related issues.

Step # 2: Be Familiar with the Market

Even if you have a good broker, you also need to exert an effort in knowing the condition of the real estate market where the property is located. This is important so that you won’t buy something that is overpriced. It is also important for you to check the amenities, extra maintenance costs, and other considerations before you take the plunge and get a mortgage for the property.

Step # 3: Inspect the Home or Property Carefully

Aside from determining the market, you also have to personally check the home, apartment, or property you are going to buy. Even if your real estate agent says that the house is in good condition, you still have to take some time in inspecting the property yourself before you apply for mortgage because your standards may not be the same as that of your agent. You need to check the neighborhood and determine if all the utilities are working and if there are leaks and other things you need to spend on to make the house livable. The roof is often overlooked when inspecting the home for any damages, missing a bad roof can be a huge expense after the fact and could cause many headaches down the road.

Step # 4: Find the Best Mortgage

If it is your first home, you probably need mortgage for you to be able to acquire the real estate property. Do not accept the first home loan offer that you receive. It pays to shop around for good deals. Remember even a 0.05% difference in interest rate can be a big deal, especially during hard times. Also keep in mind that with every new home mortgage comes closing costs and loan fees. These fees can include title insurance, appraisal, HOA transfer fees, escrow account fees, title company closing fee. Be sure to get an estimate up front from any mortgage professional to ensure you are not getting slapped with junk fees or over paying on the actual fees.

Buying a home and arranging a mortgage is said to be one of the most stressful experiences we can have in live, yet it doesn’t need to be. No matter whether you are a First Time Buyer or moving home, the step by step guide that follows will help ensure that your mortgage application runs smoothly.

Step 1 – Contact an independent mortgage adviser

Buying a home can be one of the most exciting experiences as well as one of the most daunting. With thousands of fixed, tracker, discount and variable rate mortgage products in the market, and so many different factors to take into consideration, how do you now which is the best mortgage product to meet your needs both now and in the future. Making a mistake can proof to be costly and so seeking professional independent mortgage advice is one of the most important steps you can take.

An independent mortgage adviser will complete a detailed fact find of your current circumstances and future expectations, and will analyse what mortgage products are available based on your income, age, credit history and attitude to risk. This analysis will highlight the most suitable products for which Key Facts illustrations will be provided.

Independent mortgage advice need not cost a fortune either. In most cases a broker fee will be good value for money, and will often be offset by the exclusive rates normally available via brokers. In a growing number of cases, Independent Mortgage Advice is provided free of charge with the mortgage adviser being paid for the introduction by the lender on completion of the mortgage.

Step 2 – Mortgage Promise or Initial Agreement in Principle

Once you have selected the best mortgage deal for your requirements, it is well worth applying for the lenders initial agreement in principle, also known as a mortgage promise. This is something that can be arranged on-line or over the phone by your mortgage adviser, with the lenders acceptance decision being available within minutes of submission. The initial agreement in principle will produce a certificate of confirmation that can be shown to prospective sellers to reassure them that mortgage finance is agreed, and that you are serious about buying.

A mortgage agreement in principle can always be arranged prior to knowing what property you will be purchasing or even before you have decided on the best type of mortgage product. The certificate will normally remain valid for 3 months, and speed up the process later when you make a formal application.

Applying for an initial mortgage agreement from several lenders is absolutely fine, but unless you expect the lender to have a problem in agreeing to the mortgage amount required, you are best advised to restrict the number of credit checks that you authorize to be carried out, as too many credit checks in a short period of time can adversely affect your eventual credit score.

What if your initial application is refused?

Agreements in principle are often declined and in most cases for one of the following reasons.

- An adverse credit history has been picked up when the lender has undertaken their credit checks and credit scoring.

- The lenders lending criteria has not been met such as being too young or too old, not in employment for long enough.

When these circumstances arise your mortgage adviser is ideally placed to discuss matters with the lender, and where no resolution can be found, to advise you of other lenders and their products where the criteria does fit.

Step 3 – Complete the mortgage application

Once you have received notification that your mortgage is agreed in principle, the full application can then be submitted. To submit the full application, full details about your circumstances will be required by the lender. These details will include the details of the property, how much you want to borrow and where the rest of the money (your deposit) is coming from. Accurate and honest information provided at this stage when completing the form, can help tremendously towards the avoidance of delays in the application process later on.

There are many benefits of using a mortgage advisers services when submitting the full mortgage application, with the main benefit being that the adviser will have years of experience of the individual lenders underwriting practices, and can advise you of the best way to package and submit the application.

Bear in mind that exclusive mortgage rates, which can not be obtained direct from the lender are often available through an Independent Mortgage Adviser.

As well as completing the application form, some documentation will be required to back up the details given. Exactly what, will depend on the type of mortgage applied for and the lender involved. In the case of a self certification mortgage, the documents required can be as little as proof of your identity and proof of residence.

Typically when borrowing 75% – 90% of the property value, the lender will require the following:

- Pay slips (often for the last three months)
- P60
- If self employed copies of two or three years accounts will be required.
- Bank details for the Direct Debit mandate.
- Proof of identity such as a passport.
- Proof of address such as a recent utilities bill. or bank statement.
- Proof of the last 12 months mortgage payments or a tenancy reference if renting.

Where documentation is required in support of the application, any delay in providing it will delay the lender issuing the mortgage offer. Dealing with an independent mortgage adviser ensures that you will be informed about any documentary requirements quicker than if dealing direct with the lenders.

Step 4 – Instruction of the property valuation

Once the mortgage application is submitted and agreed, the lender will instruct a valuer to inspect the property. The cost of the valuation is born by you unless the mortgage you are applying for includes an incentive such as a free valuation fee.

The mortgage valuation allows the lender to confirm the value of the property and agree to the lending required. In addition to the basic valuation for mortgage purposes, you can ask the lender to carry out a more detailed survey of the property (which is advisable) such as a homebuyer’s report.

The homebuyer report is in a standard format and is designed specifically as an economical survey and an effective way to minimize risk. The homebuyer report ensures that any defects or problems that could effect the value of the property, are picked up highlighting any that are urgent. As part of the Homebuyer’s report an integrated valuation for mortgage purposes is included, unlike a structural survey.

Step 5 – Instruct a Solicitor

It’s the solicitor’s job to review the Home Information Pack (HIP) which includes an Energy Performance Certificate, an index of contents, a sale statement, evidence of title, searches and leasehold documents, when you are buying.As well as negotiating and exchanging contracts the solicitor’s job is also to receive funds from the lender for transfer to the sellers solicitor as well as updating the title deeds. Once contracts have been signed and returned the solicitor will agree a date for completion. On the day of completion, funds will be exchanged between solicitors at which point keys can be collected to your new home.

If using an independent mortgage adviser, check to see if a fixed legal fee package is available, as this can often save time and money, and can result in using a solicitor where the adviser has some leverage to make things happen quickly.

If you are just about to buy a house, one of your most important decisions, almost as important as which home you buy, is what type of mortgage to take out. You basically have two choices; a fixed rate mortgage (FRM) or an adjustable rate mortgage (ARM) Choosing a mortgage that best fits your specific needs can potentially either save or cost you a great deal of money over the term of the mortgage.

Around 70% of homebuyers today choose a fixed rate mortgage, rather than an adjustable rate mortgage. A fixed rate mortgage is exactly what it sounds like. The interest rate on the loan doesn’t change, regardless of whether interest rates in general go up or down. An adjustable rate mortgage may go up or down, depending on the interest rate at the time. Your decision may be influenced by your overall financial situation, the present state of the economy and the cost of your house.

The overall amount that you end up paying for your home can be greatly influenced by even a small change in the interest rate. A lowering of the interest rate by just one point can mean that a homeowner with a 30 year mortgage can enjoy average savings of around $50,000 over the term of their mortgage. An increase in the interest rate of just one or two percent can mean monthly payments that are between $50 and $250 higher, depending on how much you paid for your home. Whether you are taking out a 15 or 30 year mortgage may also influence your decision to take out an adjustable rate or fixed rate mortgage.

The biggest benefit of a fixed rate mortgage is the peace of mind that comes with knowing that regardless of how bad the economy is the rate on your mortgage loan won’t increase; neither will your monthly payment amounts. In fact, the terms and conditions of a fixed rate mortgage are protected by law. A fixed rate mortgage is an ideal option for those buyers who just don’t want to take a risk, or consider themselves the cautious type when it comes to finances.

Another benefit of a fixed rate mortgage is that it makes it easier for the homeowner to budget the expense. Your mortgage payment is probably your single biggest expense and you always know exactly how much the monthly payment will be. Some buyers believe that this makes it a little bit easier to plan and budget for some of life’s other big expenses. Certain things like college funds and retirement for example. With a fixed rate mortgage, the amount of the monthly payment will only increase if there is an increase in the amount of insurance rates or property taxes.

A fixed rate mortgage is not affected by inflation or the cost of living. Supposing you have a monthly mortgage payment of $700; this amount will still be the same after five, ten, and twenty years have gone by. Even though everything else has increased in cost, your mortgage payment will stay the same. One way to offset this is to consider the possibilities in the future. Chances are you could have a more disposable income as time passes. You could be earning a higher salary, but still paying the same every month for your home.

If you prefer the safer option of the fixed rate mortgage, one solution would be to take out a fixed rate mortgage and then refinance your loan if and when interest rates are lowered. This approach keeps your options open. If interest rates go down sufficiently to justify the cost of refinancing, you can do just that; if rates stay where they are or go up you will be glad you have the fixed rate mortgage.  Some financial experts advise that it is only worth refinancing if the interest rate will be at least 2% lower than your current rate, although that decision entirely is up to you.

Another strategy that can be applied towards either a fixed rate or adjustable mortgage is to pay an extra amount each month towards the principal. By doing this regularly, you can potentially save a large amount in interest charges. It can also make the term of the mortgage shorter and you may be able to own your home sooner. Make sure that you specify that any extra amount that you pay is going towards the principal and not the interest. By doing this, if you have a fixed rate mortgage and the rate is not as low as it could be, you are getting ahead a little bit.

Ultimately the decision of whether to take a fixed rate mortgage or an adjustable rate mortgage is yours. Although several factors may influence your decision, one of the biggest questions to ask yourself is how much of a risk you want to take.

What if you knew how to easily locate the right real estate agent, one that puts your interests first. Use my tips and advice to decrease the stress of buying a home and find the best real estate agent for you.

I certainly understand if you question why I believe I know what constitutes a good real estate agent. I would wonder if I were you.

Here is the answer. For more than 28 years, my husband and I have helped people buy homes. Since I left off being a kid, residential real estate and mortgage financing have occupied my life. I was a licensed real estate agent in the first part of my career and the owner of a mortgage company the last part of my career.

Most people will buy one home, maybe two. Others may purchase an investment or vacation house. In most cases you are going need the services of a qualified real estate agent. And yes, choosing a good real estate agent is crucial.

Instead of listing warnings, do’s and don’ts, allow me to share how I interview and choose a real estate agent.

Number one on my list is to find an individual who makes me feel at ease. Buying a house can be difficult and exhausting at times so why complicate it by employing a real estate broker you don’t feel comfortable with.

It is a shame how many home buyers I observe working with agents who are not matched well to them. The dissatisfaction is discussed for weeks, months and sometimes years after moving into a home.

I believe that buying a home should be fun and exciting. After all it will probably be the most significant and most expensive purchase that you are ever going to make. So why not work with someone that you feel comfortable with since you are likely to be in contact with them on a daily or weekly basis for several months.

Second I am looking for an agent who has my best interests in mind. But how do I know if a real estate broker is truly interested in my personal well being and not simply concerned with making the sale? There are several indications.

Does this agent listen to me? If your agent doesn’t directly address your concerns and questions, this may not be the real estate agent for you.

Does your prospective real estate representative talk first and ask questions later? This is another indication of whether your best interests have been kept in mind. Every great agent listens to what’s on your mind after they ask what is important to you.

A thorough agent will always ask you a lot of questions before ever offering to take you out to view houses. You see, a real estate agent is a valuable asset and they know that your time as well as theirs is valuable too. So they are not going to waste your time showing you houses that you can’t afford or don’t fit your circumstances.

Even though it can feel a little uncomfortable, anticipate a trained agent inquiring into your finances. This is the type of real estate agent I look for.

Some agents give advice without taking into consideration your circumstances. A good agent doesn’t give advice but instead presents options. Your agent should be solution oriented by presenting you with choices that allow you to select what you feel is best for your particular circumstances. Watch for and choose a real estate broker who considers options based on your needs rather than theirs. Above all never feel rushed to make a decision.

High on my list when I interview real estate professionals is watching for individuals who admit when they are unsure of an answer to my question. No matter how experienced a agent, no one has all the answers. So when I ask a question and I hear the words “I don’t know” followed by “but I will find out” it is refreshing. Possessing every answer is not what I care about. That is why I rarely decide on a broker based on age or even experience. A real estate broker with enough enthusiasm and energy to do that little bit extra is who I pick.

Even though it will be your home and a place to live, central to every transaction is money. Although a real estate agent isn’t qualified to approve you for a mortgage, it is still important to be asked about your financial ability such as how much money you have saved for down payment and closing costs.

Top real estate agents know from experience that mortgage financing is the hub of every real estate transaction. As a home buyer, protect yourself by understanding the cost before going out to view houses and especially before you make an offer.

A good agent can help you with this too or you can simply contact a licensed mortgage broker who can prepare a Good Faith Estimate of Closing Costs. If you are comfortable asking your real estate agent, most can refer you to a couple of mortgage brokers for detailed estimates of mortgage costs for your comparison. It is critical that you know what costs to expect before you shop for a house and especially before you make an offer.

Lastly, remember that buying a house is your decision. Take responsibility for your decision by seeking advice from people you like and feel can trust.

I often say when it comes to buying or refinancing a home, it is your house and your mortgage, no one is going to care about it more than you.

Buying a home is usually the biggest financial purchase a person will make, and you want an agent that is truly working for YOU. But, not all agents are created equal. In fact, many home buyers find out the hard way that their agent wasnt solely on their side. In this segment, we explain Exclusive Buyer Agents and what they can do best for you not just at contract time, but throughout the entire process of buying a home. Buying a home is usually the biggest financial purchase a person will make, and you want an agent that is truly working for YOU. But, not all agents are created equal. In fact, many home buyers find out the hard way that their agent wasnt solely on their side. In this segment, we explain Exclusive Buyer Agents and what they can do best for you not just at contract time, but throughout the entire process of buying a home.Buying a home is usually the biggest financial purchase a person will make, and you want an agent that is truly working for YOU. But, not all agents are created equal. In fact, many home buyers find out the hard way that their agent wasnt solely on their side. In this segment, we explain Exclusive Buyer Agents and what they can do best for you not just at contract time, but throughout the entire process of buying a home.