Buying A Home

When deciding to purchase a home, there are many things you should consider. The best suggestion I would make is to gain as much information as possible about your financial situation. Many people when considering purchasing a new home as a first time buyer often make the mistake of falling for or assuming a lot of myths are true, such as it requires a lot of money for a down payment, or it is cheaper to rent than it is to purchase, or my credit score is not high enough.

What’s the difference between being pre-qualified and pre-approved for a mortgage?
Typically you will first pre-qualify for a mortgage, then get pre-approved before you have found the specific home you wish to purchase. What is the difference?

Pre-qualification: An informal determination by a lender or mortgage broker stating how much mortgage you can afford. Without any supporting documentation.

Pre-approval: A guarantee in writing by a lender to grant you a loan up to a specified amount. With supporting documentation, i.e. pay statements, bank deposits..etc..

Many lenders are eager to work with first time buyers or buyers that have been out of the market for a long time. These lenders will provide valuable information on your specific financial situation, working with you, they will run a credit report which will provide information such as credit score Fair Issac Corporation (FICO) which scores can range from 300 to 850, and just because you have an  850 score doesn’t mean that you have the best score or the worst either, because to each lender uses the score differently and will also consider the fuller picture, such as how many open credit card accounts that is open, car payments, insurance (home and auto), and any of the other myriad of financial information reported on the credit report to include how long you have been on the job, or how long you have lived at your current address.

   They can even help you detect errors on your report, while they may not be able to fix those errors they can direct you on the best possible source to fix those errors, some can be simple to fix and you can report it to the credit agency, others you will need professional assistance (Credit Repair Company). A word of caution here Credit Repair companies are generally honest hard working individuals, and while you may see ad’s that say they will fix your credit for free, this isn’t true, they (the honest ones) will charge you a fee sometimes it is a small fee or it can be several hundred dollars it depends on the complexity of the problem that needs to be fixed on your credit report.

   Depending on the mortgage lender you are working with, most have different and varying programs available to assist you  with purchasing that new home. Programs such as Federal Housing Authority (FHA), Veteran Association (VA), United States Department of Agriculture (USDA/RHS), Conventional loans. Each program has different requirements to qualify for them. Then there are even programs that have down payment assistance, programs that have a 1% down payment, there are fixed rate programs or Adjustable Rate mortgages, there is 15 or 30 year programs. Your lender will help you determine which programs you qualify for and may even suggest which one is best for your situation.

   This is where the fun begins, once you have the knowledge of how much home you can afford, the next step that I would recommend would be to sit down  and write out a Want’s and Need’s list. A list of what you actually have to have in a home (number of  bedroom’s, size of garage..etc.) and things that would be nice if a home happens to have. Sit down with the family, have each to create a list of what they would like to have in their home. Then compile the list’s to create a master list of what is desired in a new home.

   Once you and the family have decided what type of home your family needs, and a long with the information from the lender for how much home you can afford. Then begins the search for a home, while there is hundreds if not thousands of websites available to search for homes, the best would be Realtor.com this has the most accurate and up to date information. Even better is to contact a Real Estate Professional, a Realtor® . Come back tomorrow and find more beneficial information.