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Buying a home

The process of buying a home can be both exciting and intense, particularly for the first time home buyer, there many factors at play, it is therefore important to take a very careful and informed approach before stepping into the real estate zoo, and the following guidelines can help you plan ahead;

Make relevant pre-purchase decisions like the amenities you want, based on a range of price factors, basic rule being that a home which is 2.5 times your annual income is affordable or your monthly payments (including interests) must equal one-fourth of your gross pay or one-third of net pay.

Sources of finances are; Mortgage brokers they work with different lenders. Mortgage bankers they work for the banks, Commercial banks offering a variety of options and bank rates are competitive. Savings and Loan Associations the process of getting a mortgage much easier compared with banks. Credit Unions interest rates and terms are very attractive and competitive, Stock brokerages and online lenders deal only with reputable companies with secure sites.

Having a pre-approved loan than a pre-qualified one translates to greater negotiating power and a relatively faster closing period.

If your credit record is less than perfect, Federal Housing Administration (FHA) might be the ideal loan for you, typical loans require 20% down payment, FHA loans require only 3%.

Shop for homeowners insurance policy, as soon as purchase offer is accepted, you can save money by having a higher deductible on your policy and if the mortgage insurance is funded into the loan this results in the addition of a premium of 1.5% on the loan balance.

You should take advantage of new laws entitling new homeowners to $8000 tax credit.

FHA loans are utilized mostly by first time homebuyers; there are no income limit qualifications and allowable debt ratios are higher than debt ratio limits for conventional loans.

Good communication with the real estate agent, helps them tailor your needs more accurately.

Setting aside, a higher down payment means lower mortgage payments and do not overburden yourself with other debts upon completion of a home loan application.

Inspect homes more than once, with the aid of a checklist provided by the estate agent or appoint a qualified inspector.

A good number of developers are selling new homes, packaged with special incentives.

The sales history of homes in a neighborhood gives you an idea on the ratio between listed price, and selling price of a home.

A multi-policy insurance package (home and auto) earns you relative discount and you could get further discounts, if say, you install an alarm system that reports to a central system.

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