first time home buyer – owner loan

September 27, 2009

3 People the First Time Home Buyer needs on their Team

Filed under: Real Estate — Tags: , , , , , , , , , , , , , , — admin @ 9:07 pm
Heather Dunlop asked:


Many first time home buyers are not sure where to get started. They are ready to buy their first home and want to make sure they don’t make any mistakes.  So where do you go first?

 

There are three people that will be important to the first time home buyer.  These people can walk you through the process and help you purchase your first time. 

 

The first person you want on your team is a Realtor.  You want to make sure you find a Realtor who specializes in working with first time home buyers.  They will have the patience to answer all of your questions and reduce your fears.  They have been through the process many times and will be able to anticipate your questions and your needs, making the process easier on the first time home buyer.

 

Your Realtor can also help you find the other two people you need on your team.  Your Realtor will already have relationships with these other people, who are also familiar with working with first time home buyers.

 

The second person you want on your team is a Mortgage Broker.  Again, find a mortgage broker that works with first time home buyers.  This mortgage broker will know about the city, state, and federal programs available to help first time home buyers purchase their dream home.  They know what kind of loan you can qualify for, how much you will need for a down payment, and the lenders requirements.  Your mortgage broker will get your pre-approved so you know exactly how much house you can afford and don’t waste your time looking at houses you can’t buy.

 

The third person you want on your team is a Home Inspector.  As a first time home buyer you are not aware of what is involved in looking at the details of a home to make sure it is safe and will not require costly repairs.  Your Home Inspector will go over every nook and cranny and tell you what they find.  A good home inspection can save you from buying a home that needs major repairs without you knowing about the.  Be at the house with the Home Inspector so you can ask them questions about what they find, giving you a better understanding of the condition of the home.

 

Build your team with people who specialize in working with first time home buyers.  You’ll be glad you spent the time to find the right people to help you.



Beverly

July 31, 2009

First Time Home Buyer Loans – Joyful Beginnings

Filed under: Mortgage — Tags: , , , , , , , , , , , , , , — admin @ 4:42 am
Adam Hefner asked:


During much of America’s history only the wealthy could afford home ownership. It was always referred to as the “American dream”. Today it has more transitioned from a dream or fantasy to an expectation. Home ownership is viewed by many as a given part of American life. What caused this evolution? It mainly was the availability of first time home buyer loans made possible by the Federal Housing Administration (FHA).

Prior to FHA loans lending standards were strict for all mortgages. For a brief window recently, many lenders greatly relaxed these underwriting standards. The result is seen in today’s headlines discussing waves of defaults and foreclosures. This has caused lending standards to quickly tighten again going back to what they used to be.

Lending standards relate to several aspects in which the borrower is reviewed. The first of these is a requisite minimum credit score. Unfortunately, many new buyers are too young to have established extensive credit. This served to keep this segment of would be buyers out of the home ownership universe.

FHA loans sought to address this by providing for a secondary market for loans without the required credit history. This opens the door to owning a home to many young families who otherwise would have had to wait years while developing sufficient credit history. Mortgages also traditionally required a 20% down payment.

Even for a modest $125,000 home this equates to $25,000. Many first time buyers did not have this amount saved yet. Requiring a full 20% down payment further delaying many first time purchases. FHA loans also address this problem. With an FHA backed loan the borrower does not have to come up with the full twenty percent at closing.

FHA loans only require 3% down payments. That $125,000 home can now be purchased with a down payment of $3750 putting it well within the reach of most anyone who desires it. Also reduced are closing costs and points. These are fees typically charged to the borrower and payable in full at closing. These fees each tend to be small but can add up quickly.

FHA loans allow for these fees to be cut in half. Furthermore, the portion still owed by the borrower can be paid over the life of the mortgage, most usually 30 years. This often translates to another few dollars a month on top of the normal payment. This again removes a former obstacle to first time buyers.

First time home buyer loans backed by the FHA are a wonderful creation for those just starting out and desiring to own their home. There are more details and requirements to be eligible for an FHA backed loan. Do the research to find out if you can benefit from this great program.



Stanley

May 17, 2009

7 Common First Time Home Buyer Mistakes

Filed under: Non Fiction — Tags: , , , , , , , , , , , , , , — admin @ 7:50 pm
anonymous asked:


Not all that long ago I was a first time home buyer. Actually, it was a while ago, but that’s okay! I remember being very excited about owning my first home. I was also pretty naive and during the home buying process realized just how little I knew about real estate and how difficult it was trying to navigate the murky waters and not get eaten up by folk looking to take advantage of me.

It was easy to make mistakes back then, and is even easier nowadays to turn a pleasant dream of owning a home into a nightmare. But if you’re able to avoid the 7 common mistakes that home buyers make it could help you achieve a safer and smoother transaction.

First, changing jobs during the home buying process is a definite no-no! Lenders like to see employment stability and job tenure, and as a general rule will hold job hopping against you. So, unless you just can’t stomach your job another minute tough it out until you close on the sale of your home.

Second, never give earnest money deposits directly to For Sale by Owners. If the deal falls through you won’t have any leverage to get it back. Instead, put the deposit into a trust account until the transaction is finalized – title companies, attorneys and closing agents can help you with this. In any regard your contract needs to specifically state what will happen to the deposit in the event that the transaction falls through.

Third, stay practical and realistic during the home buying process and understand that while some sellers are willing to fix their homes to sell them others aren’t. So, don’t let a refusal to make repairs close the door on your dream home. However, at the same time don’t let your desire for a particular home blind you to costly repairs down the road.

Fourth, arrange in advance to have the utilities turned on in your new home. The utility companies usually need at least a few days to switch the service. Also, don’t forget to cancel the service at your old residence. This seems simple enough, but there are so many things to remember that this one is often overlooked.

Fifth, be sure to get hazard insurance for your new home and be able to show proof of purchase prior to closing. Failure to have insurance at the time of closing may delay the closing, which could result in all kinds of unforeseen complications; angry sellers, you’ve already given notice to move out of your old place and have no place to go, etc.

Sixth, purchasing a home is a business deal, so treat it that way. Don’t get too close and personal with the seller, as it could unexpectedly lead to hurt feelings and/or deal breaking situations. For example, you could make a seemingly harmless comment about how you dislike like the decorations in the mother in law suite, only to have the seller get upset because they have great sentimental value attached to it.

Finally, use an agent, unless you’re well schooled in real estate transactions. It’s most buyer’s fantasy to save money by cutting out a Realtor. However, it’s a full time job keeping up with all of the daily details of a contract, including the lender, the seller, and the seller’s agent. It’ll be your agent’s responsibility to do all of this; as well as disclose any information that they are aware of that you might otherwise be unaware of.

In closing, buying a home is a business transaction and may be one of the largest transactions you’ll ever make. By treating it that way and surrounding yourself with knowledgeable professionals you can have smooth, safe transactions. Anything less becomes risky business, at least until you know what you’re doing.



Leo

May 16, 2009

Failing Banks? What It Means For The First Time Home Buyer

Filed under: Real Estate — Tags: , , , , , , , , , , , , , , — admin @ 12:05 am
Jennifer Stromsteen asked:


It is the opinion of many people that the government, despite what the President may say, will in fact bail out mortgage high players Fannie Mae and Freddie Mac. For these companies to fold would be detrimental to the economy. But what exactly are Fannie Mae and Freddie Mac and what do they do? Simply put, a home buyer achieves a mortgage from a lending institute and Fannie Mae or Freddie Mac purchase the mortgage to then resell it again to investors. They receive money from the sale to the first lender to continue lending.

In the last decade Freddie Mac handled nearly $164 billion in New York mortgages alone; serving over 1,325,000 families. If Freddie Mac and Fannie Mae have serious financial problems then credit will tighten and it will become increasingly difficult for any consumer to get a mortgage; but particularly for the first time home buyer. At this point it is speculated that these companies will not need to borrow money from federal reserves, the government or the treasury; however, the government has stated that if they do need it they can come for it. With the potential for government bailouts confidence is building.

When push comes to shove, impact from national news or news on a local level does not change the rules in applying for a first mortgage; make sure you have your finances in order before shopping for a home, make sure your credit is in line and be aware of your credit score. The first time home buyer needs to educate themselves more than ever as lenders begin to tighten their belts. Knowing what your credit score is, how to increase that score and look favorable to the lenders will increase your chances of obtaining a mortgage regardless of what is happening in the financial world; these are basic rules.

Before a lender will grant a loan for a home he will first run a credit report on the buyer to help them get a picture of the buyer’s ability to pay the loan. The last thing a lending institute wants is for a buyer to get in over their head and default on their mortgage. It is therefore recommended that before shopping for a home or showing up at the lending institute to apply for a first mortgage you run a credit report of your own. This will help you figure out any areas that need to be corrected and what areas could be improved. Once you are satisfied and your lender runs the report he will be able to help you understand what you can afford. If you have discovered your credit is in shambles or your credit score is low there are ways to bring up your credit score and you will have the time to do so.

Freddie Mac and Fannie Mae having financial problems is just the reflection of what is happening in the economy today; we are all feeling the pinch. This is a time, more than any to tighten our own belts, avoid using credit excessively and manage your credit well; doing these things will allow you to be among the few buyers that the lenders extend a first time mortgage to.



Jean
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