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Information on mortgages, home equity loans, and consumer credit to help you use the power of financing to your advantage.
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Mortgages > Purchase
Buying a Home
Buying a home is a very daunting task. If this is your first time with a new home purchase or your 5th home purchase it’s all the same. The process of buying a home remains the same, but sometimes it just seems like it doesn’t get any easier.
The basic principles or tasks remain the same for buying a new home; here are some basic bullets to remember.
Start the mortgage process early
1. Compare as many mortgage lenders or mortgage companies as possible (3-5) recommended, this should save you money on buying your home. Be careful when applying with mortgage companies for your new home, because you want to keep the credit inquiries to a minimum. You should be able to get a rough estimate or quote without having them pull your credit. At least 50% of mortgage companies today require an application fee for applying (usually $200 - $500). If there’s an application fee for you to buy your new home, make sure you check to find out if it’s refundable or not. Don’t be afraid to ask questions!
2. Know your budget before you buy a house– When buying a home it’s important to stay in tune with your finances as they can easily be consumed by your whole mortgage payment. Many lenders with the appropriate credit will allow you up to 55% debt to income ratio. The last thing you want after you buy your new home is a headache paying for it.
Consider having a real estate agent during the process of buying a new home
1. If you are not familiar with purchasing a home than it’s highly recommended to use a real estate agent to help with the process. All the mortgage forms and real estate questions will have your head spinning, so having one head is better than two.
Buying a home in the right market
1. Know the market when buying a new home. If you are like millions of other people you want to pay as little as possible for the new home so you can make as much as possible on the resale down the road. If you are working with a real estate agent who is familiar with the area make sure they give you all the information you need for buying this new home. Make sure you ask questions like:
a) What is the potential for growth in this area?
b) What is the economy like?
c) Would you (the real estate agent) purchase this home?
d) What are homes in this are appreciating (hopefully not depreciating) at per year?
e) Assuming you found a home – What is the historical information on the home. What prices have
the homes been selling and reselling for?
f) Make sure you ask about the schools in the area. This could mean a huge difference when reselling the home later.
Are you ready to buy a home ?
I think that most of the time you don’t feel 100% ready or 100% confident in your purchase, but there’s good reason for that. The cost of a new homes are going up every day and ever day you wait they get more expensive. If you are in a hot market don’t spend too much time doing research, because before you know it the “hot sheet” house will be consumed by someone else buying a new home. Make sure you do the critical research to make the best informed decision about buying a home.
• Apply now for a home loan!
The tips on this website should be considered food for thought only. Lendingtips.com is a clearinghouse of ideas, not a professional adviser. Before any important decision, please consult the appropriate professionals (lawyer, accountant, real estate agency, broker etc.).
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• Mortgages > Purchase Articles Archive
• Mortgage Loan Calculator Use this calculator to determine your monthly payment and amortization schedule.
• Mortgage Qualifier Can you buy your dream home? Find out just how much you can afford!.
• Refinance Breakeven Should you refinance your mortgage? Use this calculator to determine when you will breakeven!
• Rent vs. Buy Are you better off buying your home, or should you continue to rent?.
• Amortizing Loan Calculator Enter your desired payment - and let us calculate your loan amount. Or, enter in the loan amount and we will calculate your monthly payment!
• ARM vs. Fixed Rate Mortgage Use this calculator to compare a fixed rate mortgage to two types of ARMs, a Fully Amortizing ARM and an Interest Only ARM.
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