First-Time Home Buyers

Written By: Miller and Associates Realty On: 12th October 2013 Under: Buyers, General, Listings, Market Updates, Real Estate Market, Real Estate News, Real Estate Tips, Tips, Uncategorized

Getting Started

It is easy to get overwhelmed with the thought of buying your first home. Following these six steps will ease the stress and help you find your dream home fast.

1.    Calculate how much you can afford

When you’re buying a home, mortgage lenders don’t look just at your income, assets, and the down payment you have. They look at all of your liabilities and obligations as well, including auto loans, credit card debt, child support, potential property taxes and insurance, and your overall credit rating.

Follow this link and use the Home Affordability Calculator from MSN.com to determine how much of a mortgage you may be able to obtain http://realestate.msn.com/BuyAndSell/Tools/ha_calc.aspx.

2.   Get preapproved for a loan

“Pre-approval” means you have met with a loan officer, your credit files have been looked over and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a pre-approval letter, which displays your borrowing power. You may see as many lenders as you wish and get numerous pre-approvals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports.

Although it is not a final loan commitment, the pre-approval letter can be shown to listing brokers when putting an offer on a home. It shows your financial strength and that you have the capability to go through with a purchase. This info is significant to owners since they do not want to accept an offer that is likely to fail because financing cannot be obtained.

3.   Find a star agent

Whether you’re buying or selling, the difference between having an average real-estate agent or a star agent can save your pockets thousands of dollars. It can mean selling your home for top dollar or losing the house of your dreams to a more prepared buyer.

4.   Make an offer that stands out

Just as temperatures rise, so do multiple offers on prime properties in recovering markets. To stand out from the crowd, an increasing number of buyers are using the old-fashioned approach and penning a “love letter” to sellers telling them what they adore about the house and why they are the best suitor to end up with it.

5.   Lessons from home inspectors

Home inspections will vary depending on the type of property you are purchasing. A large historic home, for example, will require a more specialized inspection than a small condominium. However, the following are the basic elements that a home inspector will check: Structure, Exterior, Roofing, Plumbing, Electrical, Heating, Air Conditioning, Interiors, Ventilation/insulation, and Fireplaces. It is ever so important to have your home inspected before selling it and to have a home inspected before buying it. Again this is an area that will keep your pockets from running dry.

6.   Understand and negotiate closing costs

The lender or mortgage broker is required to give you a GFE within three working days of accepting your loan application. The GFE comes in the form of an itemized list of estimated closing costs for everything from the lender’s fees to the appraisal charge to the title insurance premium to a partial month’s interest payment. The lender or broker charges some fees, and third parties charge others. The first step is to find out which are loan origination fees and which are third-party fees. Don’t guess. Ask the lender or broker.

Some of your biggest savings by negotiating the items in the 1100s section of the GFE: title insurance, title search, title exam, attorney’s fees and settlement fees. Most borrowers use a title company recommended by the real estate agent or lender. But you don’t have to. You can shop for title insurance and settlement services, just as you shopped for the house and for the loan.

Keys to lowering costs:

• Ask for a justification for each lender-charged fee.
• If the lender charges an application fee, ask if it will be credited toward closing costs.
• If the lender charges an underwriting fee as well as a processing fee, ask for details of those services. Maybe you’ll find a few that can be waived or reduced.
• Recognize that some items are non-negotiable: taxes, city and county stamps, recording fees, prorated interest and reserves.

For more information visit http://realestate.msn.com/BuyAndSell/FirstTimeBuyers.aspx