Your Money Matters: Buying First Home Need Not Be Overwhelming
Are you one of those people who considers life pretty good? You're thinking about getting married and you have a good job, a nice car and money to pay off the student loans. You have spare time to spend hangin' out with your friends.
The only negative in your life right now is having to pay rent and dealing with roommates. For many Americans in their late 20s and early 30s, the "whoosh" sound of paying rent each month eventually turns to thoughts of owning their own piece of the American dream. However, the process of actually buying a home can seem overwhelming--even daunting--to some.
"First-time homebuyers can feel intimidated by or even 'out of control' during the whole home-buying process," says Jim Ferriter, executive vice president for GMAC Mortgage. "But there's hope. An experienced loan officer, combined with innovative products and services, can help first-time homebuyers better understand their financing options and boost their confidence in purchasing their first home."
Ferriter, who has more than 25 years' experience in mortgage lending, offers the following tips for first-time homebuyers:
1. Save, Just A Little Bit More--Of course it's important to save money for the down payment and closing costs. But there's more to buying a home than figuring out if you can pay a monthly mortgage payment. There are costs similar to renting, but now you must be prepared to maintain a home, too. Weekly shopping trips to your local big-box home store to purchase everything from decorating items to a lawn mower can add up quickly.
2. Check Your Credit--An individual's credit score will have a significant impact on his or her mortgage loan approval and interest rate. A good first step in the home-financing process is to check your credit history. You can request a free credit report from any of the three credit-reporting bureaus: Equifax, TransUnion or Experian. Carefully review your report and contact the credit-reporting bureaus to correct any misinformation.
3. Get Preapproved--Before you start working with a real estate agent, consider contacting a mortgage lender to obtain a preapproval credit decision. A loan officer will review your financial status, including your income, cash flow and credit score, to help you determine the maximum monthly housing payment for which you may be able to qualify, and, if qualified, "preapprove" your mortgage before you've found a home. Armed with a credit preapproval, you can start searching with a much better idea of the price range you should be looking in, and in turn save time as you'll know the right homes to focus on.
As you start thinking about and preparing for the preapproval process, start shopping for the mortgage lender from which you would like to obtain a mortgage for your new home. Because this process is new, it's easy to go with the first lender or loan officer you meet. Instead, take your time and shop around. Start by asking friends, co-workers and family members for recommendations. When you've identified two or three loan officers, ask for references. Remember, obtaining a pre-approval may offer more confidence and certainty to home sellers.
In addition to pricing (interest rate and closing costs), focus on customer service as well as other services and tools that a mortgage lender may be able to offer you. For example, in addition to offering the preapproval program, GMAC Mortgage offers a feature called "HomeCommand," which allows you to cap a mortgage rate for up to 126 days while you shop for your dream home, as well as a free home-finder service that can give you a jump on other house hunters, alerting you to homes that hit the market that match your search criteria.
4. Don't Be Afraid To Ask Questions--Once you've found your new home, the mortgage lender will help you through the details of the loan process. From application to closing, your loan officer will work through the financing process with you, just as your real estate professional will in the home-buying process. Your mortgage loan officer can also be a valuable source of information, so be sure to take advantage of his or her expertise. Throughout the process, read all loan documents carefully and involve an attorney, if necessary.
5. Inspect It--Before you commit to purchasing a home, don't forget to hire a licensed home inspector to conduct a thorough assessment of the property. An inspector can alert you to any major problems with the home, and/or help you understand potential short-term and long-term home maintenance issues.
Buying a home for the first time can seem like you're riding on a roller coaster. But by doing your homework, asking lots of questions and taking your time, you can stay in control and discover an overwhelming sense of accomplishment in buying your first home.
Many mortgage lenders recommend that first-time homebuyers have at least three to six months in additional savings before applying for a mortgage.
The only negative in your life right now is having to pay rent and dealing with roommates. For many Americans in their late 20s and early 30s, the "whoosh" sound of paying rent each month eventually turns to thoughts of owning their own piece of the American dream. However, the process of actually buying a home can seem overwhelming--even daunting--to some.
"First-time homebuyers can feel intimidated by or even 'out of control' during the whole home-buying process," says Jim Ferriter, executive vice president for GMAC Mortgage. "But there's hope. An experienced loan officer, combined with innovative products and services, can help first-time homebuyers better understand their financing options and boost their confidence in purchasing their first home."
Ferriter, who has more than 25 years' experience in mortgage lending, offers the following tips for first-time homebuyers:
1. Save, Just A Little Bit More--Of course it's important to save money for the down payment and closing costs. But there's more to buying a home than figuring out if you can pay a monthly mortgage payment. There are costs similar to renting, but now you must be prepared to maintain a home, too. Weekly shopping trips to your local big-box home store to purchase everything from decorating items to a lawn mower can add up quickly.
2. Check Your Credit--An individual's credit score will have a significant impact on his or her mortgage loan approval and interest rate. A good first step in the home-financing process is to check your credit history. You can request a free credit report from any of the three credit-reporting bureaus: Equifax, TransUnion or Experian. Carefully review your report and contact the credit-reporting bureaus to correct any misinformation.
3. Get Preapproved--Before you start working with a real estate agent, consider contacting a mortgage lender to obtain a preapproval credit decision. A loan officer will review your financial status, including your income, cash flow and credit score, to help you determine the maximum monthly housing payment for which you may be able to qualify, and, if qualified, "preapprove" your mortgage before you've found a home. Armed with a credit preapproval, you can start searching with a much better idea of the price range you should be looking in, and in turn save time as you'll know the right homes to focus on.
As you start thinking about and preparing for the preapproval process, start shopping for the mortgage lender from which you would like to obtain a mortgage for your new home. Because this process is new, it's easy to go with the first lender or loan officer you meet. Instead, take your time and shop around. Start by asking friends, co-workers and family members for recommendations. When you've identified two or three loan officers, ask for references. Remember, obtaining a pre-approval may offer more confidence and certainty to home sellers.
In addition to pricing (interest rate and closing costs), focus on customer service as well as other services and tools that a mortgage lender may be able to offer you. For example, in addition to offering the preapproval program, GMAC Mortgage offers a feature called "HomeCommand," which allows you to cap a mortgage rate for up to 126 days while you shop for your dream home, as well as a free home-finder service that can give you a jump on other house hunters, alerting you to homes that hit the market that match your search criteria.
4. Don't Be Afraid To Ask Questions--Once you've found your new home, the mortgage lender will help you through the details of the loan process. From application to closing, your loan officer will work through the financing process with you, just as your real estate professional will in the home-buying process. Your mortgage loan officer can also be a valuable source of information, so be sure to take advantage of his or her expertise. Throughout the process, read all loan documents carefully and involve an attorney, if necessary.
5. Inspect It--Before you commit to purchasing a home, don't forget to hire a licensed home inspector to conduct a thorough assessment of the property. An inspector can alert you to any major problems with the home, and/or help you understand potential short-term and long-term home maintenance issues.
Buying a home for the first time can seem like you're riding on a roller coaster. But by doing your homework, asking lots of questions and taking your time, you can stay in control and discover an overwhelming sense of accomplishment in buying your first home.
Many mortgage lenders recommend that first-time homebuyers have at least three to six months in additional savings before applying for a mortgage.
posted by Kumar Regmi @ 1:48 AM
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