Homefinding Book

Since most people only buy a house one time in their lives it is understandable that the average person doesn’t have a lot of experience obtaining home financing. You will find commercials and advertisements all over the place encouraging you to get your home financing with this or that mortgage company. So how do you know, which one will have your best interest at heart and give you the financing you need to get you in the home of your dreams today.

Know Where Their Loyalties Lie

The first thing you need to know about mortgage brokers, lenders, and finance companies is that their loyalties are to themselves. They are not interested in your personal situation, the future of your family, or any of the dreams you have for the members of your family. They are interested in getting a commission check. Don’t for one second make the mistake of thinking that they are in business to help you.

Once you have that firmly in mind you can move on to more important information about getting the home financing you need. The bottom line is that these people are in business to make money not to give it away. This is especially true in light of recent upheavals in the mortgage lending industry. New requirements are stricter than in years past but it is still possible to get a home mortgage with a reasonable credit record.

You Better Shop Around

Interest rates are king when it comes to getting a mortgage. Even fractions of percentage points can add up when you are talking about hundreds of thousands of dollars in home loans over the course of 30 plus years. You want the lowest interest rate possible and may need to shop around to get the interest rate that will serve you best. Check out Lending Tree for some of the best rates in the business.

Don’t fall for enticing incentive offers like free vacations or even free flat screen televisions. The price you will end up paying for them when all is said and done will be much greater than their worth if you aren’t getting the lowest interest rate available along with these exciting incentives.

Know the Lingo

It is vital that you understand the basic lingo of loan speak in order to insure that you are not getting a sour deal with your mortgage. You will hear all kinds of new words when you discuss your borrowing options.

You need to know that an ARM loan stands for an adjustable rate mortgage that can end up costing you much more money than you would have ever anticipated. You should also know that an adjustable rate mortgage is almost never beneficial to home owners.

What you need instead is a fixed rate mortgage. A fixed rate mortgage will not change when the interest rate does.

Private mortgage insurance, also referred to as PMI is an insurance that you must purchase unless you make a rather sizable down payment. This protects the lending institutions that extended you credit from the full force of their potential loss and will need to be included in your budget.

Getting the financing you need to buy a new home doesn’t need to be rocket science. Lenders like Lending Tree are names that you can trust in the world of frightening finances. But also taking the time to learn a few basic things about the process though can save you time and money while relieving some of your concerns. Keep these things in mind when checking out options for lenders and find the lender that you feel is going to go to bat for you more than any others.

It seems like such a simple process until you are faced with the first time purchase of a home. There is much more involved than boy and girl meet house. Boy and girl buy house. Boy and Girl move in. It would be nice if it were always that simple. In truth there are many steps that go on behind the scenes in order to make the sale of a house go smoothly. The problem is that buying a house isn’t something that the average person has the opportunity to practice on before the time arrives. If you follow this guide though you can save yourself a bit of heartache and several really large headaches throughout the home buying experience.

Pre-Qualify for a Loan

Do this before you ever look at a house that you are interested in buying. This helps you avoid looking at homes you can’t get approval for, gives you a guideline to follow as a potential budget, and saves your from finding out after making an offer and paying earnest money that you can’t get approval for a loan. You aren’t married to a company when you get pre approval but sellers will add more weight to your offer if you are pre approved for the amount you offer than if you are not.

Establish a Budget

After you’ve been pre qualified sit down with pen and paper and figure out how much you can really afford to take on each month as far as the total package goes. Keep in mind that there will be private mortgage insurance (assuming you don’t have 20% or more for a down payment), home owner’s insurance, property taxes, maintenance fees, and additional utilities related to home ownership that you aren’t accustomed to paying each month in addition to the principle and interest payments that will be due. Make sure you aren’t setting yourself up for failure and taking on more house than you can really afford. Once you’ve established your budget you have a clear view of the price range you can handle.

Find a Realtor and View Houses

Make sure that the houses you are checking out work within your price range. If your Realtor consistently shows you houses that are outside of your price range or do not match with your requirements (number of bedrooms and bathrooms, special features, etc.) then you may want to find one that will. Once you find a house that you are interested in plan another visit. Never make an offer on the first visit.

Make an Offer

Expect a counter offer but make an offer on the house you are interested in purchasing. Some sellers require earnest money to go along with the offer so be sure you have budget for this possibility. It is important to make your offer contingent upon the results of an appraisal and inspection. You also need to schedule them both as soon as the offer is accepted.

Buying a house is rarely a one step process. These steps are only the beginning. There is a lot of negotiations involved in the typical real estate transaction and there are times when a deal falls through at the last minute. If that happens to you begin the process over again and keep the things you learned during the last transaction in mind for the next one.