Tips for First and Any-time Buyers

For first time buyers the prospect of buying a home can be both an exciting and yet frustrating experience. Buying a home is often the single greatest decision and investment many will ever make so to avoid the pitfalls new buyers often encounter here are some simple principles remember.

Start working on your credit now: The wrong time to worry about your credit is the day you find that dream house. Even though it may be even several years before you intend to purchase a home begin the process now by obtaining copies of your credit report. Double check everything there and make sure there are no negative parts to the report that are incorrect. If negative facts are correct, start working to correct those now.

Begin working on that down payment: While it is often possible to get a loan with as little as 3 percent of the purchase price, such low down payment loans are becoming more difficult to qualify for.

Look for a home you can realistically afford: This may seem simplistic but the greatest mistake when buying a home is aiming too high too soon. A basic rule suggested by most real estate experts is the home you purchase should be no more than three times your annual salary. So if you make $50,000 a year, look for something at $150,000 or less.

Get reliable professional help: Yes, you can do a lot of leg work using the Internet but new buyers, in particular are better off seeking a professional agent. If you can, find an exclusive buyer agent that can help you in the bidding process.

Get pre-approved before you start looking for a house: Don’t confuse this with pre-qualification which is really only a basic review of your financial situation. Pre-approval is based on your actual income and credit history and lets you know exactly how much your lending institution is willing to make a loan for.

Work with your buyer agent to do some good buying homework: Good bids are based on sales trends of homes similar to the one you are bidding on in the same neighborhood.

Before buying a home, always pay for a home inspection: You should hire your own independent home inspector who is experienced in doing home inspections in the area where you are buying. Better to know what you’re getting into before you get into it.

Great Home Buying Tips

 

Better Business Bureau’s Buying a Home

Product Description
Purchasing a home is the single biggest investment most people make in their lives. The Better Business Bureau’s Buying a Home: Insider’s Guide to Success assists consumers in successfully navigating the world of agents, home selection, contracts, inspecti…More

Better Business Bureau’s Buying a Home

Shopping for a Home

Nolo’s Essential Guide to Buying Your First Home

Product Description
Get the right house at the right price with insider tips and advice from the experts!Say goodbye to landlords and laundromats with Nolo’s Essential Guide to Buying Your First Home. This timely title will help you find the right place to live and invest in…More

Nolo’s Essential Guide to Buying Your First Home

How to Buy a House

There has been a lot written about the mechanics of how to buy a house. You get prequalified for a loan, then perhaps preapproved, and then you look for a home, make an offer, have inspections done and so on. Many people can help you through the process. But what if you can’t get preapproved? What if you have little income, bad credit or other serious problems that prevent you from buying a home?

Mortgage loan requirements are being toughened up again now. Once again you might even need a down payment to get a loan. A bad credit rating no longer just means paying a higher interest rate – it can actually exclude you from obtaining a mortgage loan. But there still is hope. Let’s look at how to buy a house when it doesn’t seem quite possible.

How To Buy A House With Bad Credit

To begin with, if it is a slight credit problem, you may still be able to get a traditional loan. There are several ways to do this. The first is to correct any errors on your credit report, and challenge any entries you disagree with. You have a legal right to do this. Once changes are reflected in your credit score, you may be able to apply again and get a mortgage loan.

The other way is to go to local lenders which hold their own loans. Ask around to see which ones do this. Most lenders sell the loans they make, and so these loans have to meet the requirements of the secondary market. If they keep some loans “in house” they are not necessarily bound by rules or requirements other than those they have for themselves.

You can also buy a house with another person. Many people think that this is only for married couples, but any two people can buy a home together, and the lender will look at both credit histories to determine eligibility. It can be risky to buy a house with a friend, but sometimes it works out better for both compared to renting. If you had a down payment, for example, and he had good credit, you might help each other out, and sell the home five years later to recover your down payment and the respective shares of the equity you build.

You also can look to seller financing as a way to buy when you can’t get a loan. I have seen homes sold without credit checks and with nothing down by sellers who financed the deals. The usual motivation for them to do this is to get a higher price and /or to sell a problem property, but it still can sometimes be a good opportunity for a buyer. Even if sellers don’t offer terms, if you know they own their houses free and clear you can make offers that involve making payments to them rather than getting a loan to cash them out. Make it decent offer if you want it accepted, of course.

How To Buy A House When You Have No Money

If cash is your problem, you can start by making high offers on those houses that might be sold with zero-down seller financing, as suggested above. Teaming up and buying a home with a friend who has a down payment is another possibility. There are even a few mortgage lenders out there who are still offering zero-down loans. Check around.

One way that no one seems to like much is to save the money for a down payment. This means putting off owning a home for a while, but that may be a good thing at times. For example, in some areas in 2005 it cost $600 more per month to buy a house than to rent an apartment of similar area. Suppose you could have afforded the house, but had no down payment. You could have banked the $600 you were saving by renting each month, and three years later you would have about $23,000 for a down payment. Meanwhile home prices fell.

What if your problem isn’t just a lack of cash, but also low income? Then maybe this isn’t the right time for you to buy a house. This is especially true where the cost of buying is significantly higher than the cost of renting. On the other hand, if it will cost you about the same each month to buy as to rent, try everything above to get into a home. You’ll be better off in the long run.

You might want to consider cheaper options than the usual starter homes. My first home was a mobile home on a small lot, for example. It cost less than $20,000 and I sold it for $45,000 years later. The monthly payment? $257. That certainly beat renting, and you can see that the idea some have about mobile homes not appreciating is just plain wrong (the land is where the value is, of course).

There are other ways to buy a house when your income is low and you have no money saved. If you expect your income to rise, you might look for a lease-option deal. You rent a house with an option to buy it at a set price within a set time (often a year or two). This buys you time to save money, improve your credit, and increase your income, so you can get a loan.

Buying a small lot for now is another way. Sellers of small lots may not worry about credit ratings, and they often don’t need large down payments. They know you can’t damage a piece of land as easily as a house, so they feel secure selling it with little or nothing down and they enjoy the interest they make. Your goal here is to get your finances and credit in order as you make those payments, so you can get a mortgage loan in a couple years, and put a house on the lot.

Look at all the possibilities. There is usually a way to buy a house if you keep trying.

10 Secrets to Successful Home Buying and Selling

Product Description
“Buying a house may be love at first sight or seemingly take forever. This terrific book covers all the bases. Readers will enjoy discovering the secrets as they are revealed. There is something valuable for everyone.” –Willard Scott, Noted NBC Radio and Te…More

10 Secrets to Successful Home Buying and Selling: Using Your Housing Psychology to Make Smarter Decisions

Billy T. James – Buying a House

In this skit, Billy gives us some hints and tips on how to buy a house.

(more…)

Is it a Good Time to Buy a House?

It’s a constant question now in the real estate market: Is it a good time to buy a house? Of course it is difficult to answer in an article since you may be reading this years after it is written, when conditions have changed. But whenever you find this article, the following three crucial factors are what you’ll want to look at to answer the question for yourself.

Home Values

At the moment, the first thing most people are wondering when they ask if it’s a good time to buy a house, is whether prices have finally stopped falling. Since a home is seen as an investment of sorts, we all like the idea of buying when values are rising. I am writing this in early 2009, and no, home values not only are not rising in most areas, but they don’t seem to have stopped falling.

We just bought a home anyhow, and there are several reasons why we felt comfortable doing so. The first is that prices don’t seem to be falling much in our area (Canon City, Colorado). Apart from the various foreclosures that are dragging prices down a bit, the market here is much more stable than in other parts of the country. A stable job base and the fact that prices never rose too far too fast during the “boom times” helps.

The real estate market does not act the same everywhere in the country. So to see if a bottom is near or if prices are rising, pay close attention to what is happening where you are. On the other hand, we did not buy counting on rising prices, because that is not the only determining factor. In fact, it is possible that the problems in the country will get worse and drive prices down 10% or 15% even here. So what else made us decide that for us it was a good time to buy a house?

Interest Rates

At the moment you can get fixed rate 30-year mortgage loans at about the lowest interest rate in your lifetime (no matter how old you are). Our own rate is 4.5%. That’s not a variable or “teaser rate.” It is fixed for the thirty years of the loan.

Let’s look at why this matters so much – as long as you plan to stay in the house for a while, as we do. Suppose you pass on a house that is selling for $200,000 and waited a couple years while prices fall another 10%. But suppose that at that time interest rates were up around 7.5%. You buy the house for $180,000. The payment (assuming you have a 10% down payment and borrow $162,000) is $1,132 each month for principal and interest.

But what if you had bought at $200,000 and put 10% down? Then your payment on the $180,000 loan would have been $912. That’s right, you would be paying $220 more each month if you waited and bought at the lower price. That amounts to $77,200 more that you would pay over the thirty years if you stayed in the house that long ($79,200 more in payments, but you saved $2,000 on the down payment). This demonstrates the importance of the interest rate in determining your true cost.

Personal Situation

Is it a good time to buy a house, then? That depends not only on prices and their direction, and not just on interest rates, but on where you are financially. How secure is your income? If you lost your job, could you make the house payments for six months while you looked for another? Can you count on finding another job that will provide enough income to pay for the house? Are you going to be staying in the area long enough to justify buying (renting can often make more sense if you will be moving within a few years)? These are the more difficult questions to answer, but perhaps the most important in determining if it is a good time for YOU to buy a house.

Richard Schulz | Donald Trump On Buying A House

http:/richardschulz.com/americasworkfromhomebusinessblog/

(more…)

Next Page »