Real Estate Corner…

 Q.  I’m Thinking About Getting A Home Improvement Loan. 
How Should I Go About The Process? 

 A.  You have two options.  You can either get a home equity loan or a home equity line of credit.  Both are secured by a lien against your home.  Each has their advantages and disadvantages.

A home equity loan gives you a set amount of money up front and then allows you to pay it back in a set monthly amount.  It’s frequently organized like a typical loan payment plan.  Usually, lenders will let you borrow up to 85 percent of the appraised value of your home minus the amount of the unpaid mortgage.  The interest rates on this type of loan are some of the lowest rates available and the interest you pay is tax-deductible.

On the other hand, a home equity line of credit allows you to draw upon a pre-approved loan only when you need the money.  Then, you only make payments when there is an outstanding balance.  You can often access this line of credit using either a check from that account or a special credit card. 

One of the downfalls of the line of credit is that it may have a set amount of time you are allowed to draw upon the available funds.  If your home improvements exceed the time limit, you will need to be sure you can either get an extension or another line of credit.  Some of these plans also have a deadline when all of the money must be repaid in full.  Both of these aspects limit the time flexibility for your home improvements to be completed.  

If you need advice regarding what type of home equity loan to get, or to get pre-approved for a home loan, go to http://www.firstoklahomabank.com/prslend.html.

The Complete Home Buyers Handbook

Insider's Guide to Saving Money &
Eliminating Risks When Buying Your First Home!

Chapter 7 – Closing The Deal

Drawing up contracts, having the final walkthrough, and going to the closing are the last steps you will have to take when buying your first home. This is the time when having a real estate agent you can trust, and a little knowledge of home buying comes in handy.

But what about all of those other miscellaneous fees that will come up before and during the closing? You should be aware of additional fees when you apply for a loan and when you are closing on your new home.

Contracts

Your purchase offer was the first contract you will be involved in when you want to buy a home. You should refer to this contract during the closing period to make sure that your rights are covered and that you are getting everything you pay for.

By writing a solid purchase offer that outlines what you want from the homeowners, you will be protected in case of disagreements and other issues before closing. But a purchase offer is just one of many pieces of paper you will have to see and sign before you can move into your home. Other contracts include:

• Contingencies
• Builder contracts
• Mortgage contracts, and
• Closing agreements

These contracts may vary in length depending on the forms being used and the information that will have to be included.

Contingencies

Real estate contingencies can be added onto an existing contract or can be created as a separate contract depending on what you would like to include in the purchase offer. Contingencies can include a wide range of items, including:

• Home inspections and pest inspections
• Home appraisals
• Financing
• Septic system tests
• Appliances that will stay in the home, and
• Property surveys

Contingencies can make or break a sale, so you should be sure to use the correct forms when filing contingencies and to word them correctly.

You will need to include a resolution for repairs that may need to be done before you can move into the home. If it is agreed upon in writing that the homeowners will take care of all or some repairs that may be found during a home inspection, this will save time later on.

You should also include ways to get out of the deal that include loan denial, repairs that cannot be fixed, and lead, mold, or radon that is found in the home. Having a way out of the contract will save you money and time.

If you are buying a home that is for sale by owner, you should find an attorney or real estate agent that is willing to help you create a contingency list and edit it where necessary. Do not rely on the seller’s agent because they are after their client’s best interests and not yours.

Builder Contracts

If you are buying a new home from a builder, you will have to sign a builder’s contract that states you have the financial means to pay for a new home, that you have decided on a location for your new home, and that you are ready to build.

You should hire an attorney at this point to go over the contract to see if there are any problems that will have to be ironed out before you begin building the home.

Mortgage Contracts

In order to complete your home buying, you will have to be approved for a mortgage by a lender and you will have to sign a contract in which you agree to an interest rate, monthly payment schedule, rate plan, down payment, and other fees.

These contracts are standard loan contracts that will explain the consequences of not paying your mortgage. You should read this paperwork carefully before signing anything.

Closing Agreements

These are the final contracts you will have to sign before you get the keys to your new home. You should read this paperwork carefully and be prepared to pay any closing costs at this time.

Home Warranties

If you are buying an older home, you may want to purchase a home warranty that will cover repairs that will have to be made during your first year of ownership.

While a home inspection will catch any immediate repairs, no one can foresee an oven falling apart or a dryer burning out. Since you may not have a lot of extra money left over after paying for closing costs, down payment, and mortgage payments, having extra insurance will allow you to make the repairs you will need.

Most policies will cost between three-hundred and five-hundred dollars. Coverage will begin the day of your closing and will last for a year. You will have the option of renewing the policy if you would like at that time. If you need to have an appliance repaired, you may have to pay small co-pay at the time of the repair.

Not all policies are the same, so you should do your research to find the best deal. Compare the types of repairs that are covered under the policies and choose the one that fits your home.

Closing

When you finally arrive at the closing, you should expect to:

• Sign contracts
• Do a final walkthrough
• Pay closing costs, and
• Get your keys

 The closing can take an hour or two, but usually moves quickly because there is little left to do. At the closing you will probably meet the homeowners. This could be the first time you will meet them.  This is a good time to ask if there is anything about the home you will need to know.

Sign Contracts

When you sign the contracts, read them carefully to make sure that everything that has been discussed is in the contract. Ask questions that you may have at this time.

Final Walk Through

The final walkthrough of the home will take place before or during the closing. This is the final chance for you to see the home before it becomes yours. Make sure the items on your contingency are in place so that you can sign the contracts.

Paying Closing Costs

Typically, the buyer will have to pay the closing costs associated with buying a home. But in a buyer’s market, you may be able to add a contingency that states the seller will be responsible for all costs. This may appeal to sellers who want to sell their home quickly.

When deciding who should pay the closing costs, you should research laws that may be in place that dictate who pays for what. Many times, buyers and sellers will agree to split all costs including closing, home inspection, pest inspection, and home appraisal costs. You will have to negotiate with the sellers to see which you will be responsible for.

Get Your Keys

After signing the contracts, you will receive the keys to your new home. This is an exciting feeling and one that will be with you for a long time!

Congratulations! You now have The Complete Home Buyers Handbook!

Now you know what to expect in purchasing a home...

why not call a Realtor!

Website: www.RhondasRealEstate.com

Email: rhonda@rhondasrealestate.com

Call or Text: 405-820-1740

The Complete Home Buyers Handbook

Insider's Guide to Saving Money &
Eliminating Risks When Buying Your First Home!

Chapter 5 - Financing Options

Financing your first home can be the most frustrating part of the home buying process. This is the time when you figure out how to pay for the home. Most people have to take out a mortgage loan in order to afford the price. Which mortgage loans are right for you? How much of a down payment will be necessary? What is escrow?

You will have many questions about financing your first home. By knowing the facts, paying attention to interest rates, and looking into all of your mortgage options, you will be able to choose repayment terms that will fit your current income and allow you to safely make those monthly payments.

Types Of Home Loans

Deciding which home loan is the right one for you will depend on what you qualify for and what your lender is willing to give you. There are a few types of mortgage loans, including:

• Fixed rate mortgage loans
• Adjustable rate mortgage loans
• Balloon mortgages, and
• Jumbo loans

You should be familiar with these loans so that you will be able to make an informed decision when it comes to financing your new home.

 

Fixed Rate Mortgage Loans

For first time home buyers who are on a strict budget, choosing a fixed rate mortgage may be the loan for you. Your monthly payment will never change for the life of the loan because you will lock into the interest rate given at the time the loan was processed. You can take out loans that range from ten to thirty years.

There are many advantages to taking out mortgage loans that have fixed rates. You will be able to create a monthly budget for yourself, you will never be surprised by the amount you will have to pay each month, and you will be able to lock into a low interest rate.

The disadvantages may not mean much to you now, but as your family or your income grows, you may want to refinance and pay less each month so that you will be able to afford renovations, vacations, and other luxuries.

Since your mortgage is fixed, if interest rates drop, you will be trapped paying a higher rate. While you can refinance your mortgage, you will have to wait a certain amount of time, and even then there may be complications.

For those who have limited income, who have lower credit scores, or those who want the security of paying the same amount each month, then a fixed rate mortgage is the loan for you.

Adjustable Rate Mortgage Loans

If you expect to make more money in the next few years, and want to buy a bigger home, you may be interested in an adjustable rate mortgage. The major difference between an adjustable rate mortgage and a fixed rate mortgage is that the interest rate will vary year to year in an adjustable rate mortgage.

While the interest will be capped, you will still be paying more for each year that you own the home unless interest rates drop over an extended period of time. Most adjustable rate mortgages cannot be raised more than 2 interest points per year, and up to 7 points for the life of the loan.

These loans are good for those who want a larger home and who expect to increase their earning each year to afford the increase. If you are in a position to take out an adjustable rate mortgage, you will be able to lock into a fixed rate that may be lower than your original rate.

This is the main advantage of these loans. Most lenders will only give you two years to lock into a rate or the loan will remain adjustable for the life of the loan.

Balloons Mortgages

If you are only planning on living in your first home for a few years (usually five to seven), you should look into a balloon mortgage. These mortgages require that you pay them off in five to seven years. They have a lower interest rate that is fixed.

If after the term of the mortgage has passed and you want to remain in the home, you will have to refinance and choose a fixed rate or adjustable mortgage to pay off the existing mortgage, as balloon mortgages cannot be renewed.

Only consider this mortgage if you are planning on moving after a certain amount of time or if you think you can pay the mortgage off in that amount of time.

Jumbo Loans

Most first time home buyers will not need to take out a jumbo loan unless they are buying a very large home. These loans are valued over $275,000 and are used to purchase land and a home. More collateral will be needed in order to qualify for one of these loans. The interest rates are comparable to fixed and adjustable rate mortgages, and have the same payment terms.

Now that you know about the types of mortgages that are available, you should be thinking about which lender to use. With so many lenders out there, it may be difficult to sort through all of them and find the right one. Doing a little homework will help you get the lowest interest rate possible.

Where To Find A Lender

These days there are many places to find a mortgage lender, such as:
 

• Newspaper advertisements
• Television advertisements
• Family or friends
• Your Current lender
• Your Current bank, or
• Online
• YOUR TRUSTED REALTOR!

As you can see, finding a lender should not be too difficult. You may have to contact several lenders before you find a lender that will give you a loan that meets your needs. When you apply for a home mortgage loan, the lender will check the following:

• Your credit score
• Your credit history
• Your current income
• Income of co-signer
• References (professional and personal)
• Current interest rates based on the amount you are asking for
• Status of other loans you may have
• Number of years you have been eligible to work, and
• Number of years you have had credit

There are many factors that will go into your approval or denial of a home loan. You will have to be patient. You should contact a few lenders to see which ones will give you the best deal. Once the offers have been received, you will have to make some important decisions.

You should feel free to contact your lender at any time during the home buying process with questions and concerns you may have. Other important information the lender will need before granting you a loan include:

• The home inspection report
• The termite inspection report, and
• The home appraisal

These reports are very important to a lender because they will tell the lender how much the home is actually worth and the types of damage that have lowered the overall value of the property.

Lenders expect homeowners to remain in the home for at least five years. This will allow them to make a profit on the money they have loaned you. It is not worth it to them if you have to sell the home shortly after buying it because there is too much damage and you can no longer live there.

Applying For A Home Loan

When applying for a home loan, you will have to bring the information listed above to the lenders office, or if applying online, supply copies that are faxed to the lender. You will be asked additional questions that will help lenders determine if you are able to pay the loan back on time. These questions include:

• Number of years renting a home or apartment
• Late payments on credit cards and other loans
• Active loans (such as student loans or car loans)
• Number of years at your current job
• Additional income
• Amount of the loan and number of years to pay it back
• Number of years living in an area
• Dependants that are living at your home
• Tax returns and bank statements

Applying for a loan can take a week or more. This is because background checks, credit checks, and references must be checked first before the loan will be processed.

In the meantime, you should be concentrating on gathering your paperwork, calling friends and family that you want to use as references, and sorting through your papers in case you cannot find everything the lender requests.

If you don't have your back tax returns, you can contact the IRS and request them by year. Many times, lenders will need to see returns from at least three years ago. Bank statements and bill statements from the past year should be enough to secure a loan.
 

If you are turned down for a home loan, you will be notified as to the reasons why. This can be devastating, but you should find other lenders and try to apply again. If you have poor credit, you may need to go through a lender that specializes in granting loans to those with poor credit. You may have to pay a higher interest rate, but at least you will be granted a loan.

Reasons for possible denial include:

• Poor credit or not enough credit
• Length of time at your job is too short
• Income level for the amount of loan requested
• Loan default
• Failure to pay rent or other bills, or
• Too much credit

Applying for a home loan can be stressful, but if you have good credit, steady employment, and enough income, you should have little trouble qualifying for a loan.

What Not To Do When Applying For A Home Loan

There are a few things you should not do after applying for a home loan:

• Buy a new car
• Begin a new job
• Buy new furniture and other large items using your credit cards
• Apply for a credit card, or
• Default on student loans or other loans

All of these actions will cause your credit score to change which will give lenders an inaccurate view of your spending habits and your overall credit score. If you take a job that pays less than you noted on your home loan application, your lender may not agree to grant you the loan.

If possible, do not begin a new job until you have moved into your home. Try not to spend money on credit cards. Buy furniture and other items using cash, or wait until you have signed the final contract and are a homeowner.

Increase Your Chances For Approval

There are a few ways to increase your chances for loan approval that will also help you determine what you will be able to afford each month:

• Pre-approval

Many experts agree that applying for a loan before you find a home and being pre-approved will help you create a budget, buy a home that is in your price range, and help lenders make their decisions faster.

 

• Ask for only the amount you will need

One way to increase your chances for a home loan is to not ask for more than you will qualify for. This means you will have to look at your income level, the amount of debt you have, and the expected monthly mortgage payment. You should also factor in cost of living expenses, because your lender will. Apply for the amount you will need and nothing more.

• Pay off credit cards

If you are thinking about buying a home in the next few years, you should prepare by paying off those credit cards and only using them for emergencies. Do not cancel your existing cards since this may actually lower your credit score. By showing you have a zero balance on your credit cards, you will be showing lenders that you know how to use credit wisely and you have been paying your cards off on time.

• Always pay bills on time

This includes your electric bill, rent, student loans, and other bills that you may have to pay each month. By creating a track record that can be traced, you will be showing lenders that you are a responsible person who deserves to have a home loan.

How Home Appraisals Can Affect Your Home Loan

Unfortunately, a home appraisal can affect the status of your loan. If the home appraisal comes under the selling price of the home, most lenders will not grant the loan. This can be heartbreaking, but there are a few solutions that may work depending on the rules of the lender. The following options are available:

The Homeowner Reduces The Selling Price

Depending on the appraised value in comparison to the asking price, some homeowners will be willing to lower the price of the home if they need to sell quickly.

You should not count on this happening since many homeowners want to receive the price they are asking for. You may have no choice but to find another home.

A Higher Down Payment

Some lenders will grant you the loan if you agree to pay a larger down payment on the home and assume the financial risk. This is only an option if you can afford to pay a larger down payment. Do not risk your financial security in these cases; it is just not worth it.

Dispute The Appraisal

You can send a letter to your lender disputing the appraisal or have another appraiser determine the value of the home. You will have to pay for this second appraisal, which may or may not yield the same results. There is no guarantee that your lender will accept the second appraisal.

Find Another Lender

This is a last resort move because it will postpone the closing for another month or so and there no guarantee that the lender will accept the appraisal.

Since home appraisals are required by most lenders, you should find out during the loan application process the policies that the lender has when dealing with appraisals. If your lender will not accept a lower selling price, you putting a larger down payment, or other solutions to a low appraisal, you should consider finding another lender just in case there are any problems down the road.

Home appraisals are based on the current value of homes in the neighborhood, homes that are comparable in size, the housing market, and the age of the home. While you can expect to hear different numbers from different appraisers, you will see that these numbers will usually not be too far off.

The only real benefit of a low home appraisal is that it will tell the homeowners to list the home for less money so that they will be able to sell it. In the meantime, you will have to find another home.

How Home Inspections Can Affect Your Home Loan

While a poor home inspection will usually not deter a lender from granting a home loan, you should be aware that some lenders will not grant a loan if there is termite damage or structural damage to the home due to water or age.

This will also lower the overall appraisal of the home, which could be another issue that lenders may have when deciding to approve a home loan.

If the home inspection is not favorable, ask your lender what will need to be done in order to rectify the problem. Many times removing the termites and correcting the water damage is all that will be needed. Many times homeowners will foot the bill for these types of repairs.

Additional Fees For Home Loans

You may notice that you will have to pay small fees throughout your home buying experience. It seems that every piece of paper you sign, file, or request will cost you some money. Here is a list of fees that you may be charged:

• Credit report fee
• Loan discount fee
• Lender’s inspection fee
• Appraisal fee
• Loan origination fee
• Mortgage insurance application fee
• Assumption fee
• Hazard insurance
• Title search, and
• Title insurance

These fees can add up, so you will want to be prepared and have a little extra in savings for when these fees come up. Some of these fees can be put off until the closing, but you should be planning for them in advance.

Escrow And Other Loans Terms

As you are going through the home loan process, you will run across a few terms that you will not understand. You should ask your lender to explain these terms so that you will fully understand the type of loan you are applying for, the lenders policies, and other information that will be important throughout the life of the loan. Here are some common terms you may encounter:

• Escrow

While this term can mean different things in different situations, you will see it often when closing on a home. If you place a down payment on a home, it will be in escrow until all the paperwork has been signed. The money is held by a neutral third party, such as another bank or escrow service, and will be distributed once the deal is over. You can ask your real estate agent about escrow services in your area.

• Mortgage

Even though you have heard of a mortgage before, you probably thought of it as the home loan you will be paying once you move into your new home. Technically, a mortgage is a lien on your home created by your lender. If you cannot make payments on your home, the lender will have the right to sell the property in order to gain the money that they have lost.

• Foreclosure

This is a term that refers to homes whose owners could not make payments each month. Once a lender has decided to sell the home, it will be in foreclosure. You should find out ways to work with your lender in case you miss a mortgage payment at any time. Having this knowledge in advance will make financial emergencies easier to deal with.

• Mortgage Broker

A mortgage broker is a person who does not work for a bank, but rather works on commission to match homebuyers with many lenders that may not be in your area. If you have poor credit, you may want to secure a home loan through a mortgage broker because you will have a better chance than going through a bank that only has one lender to choose from – themselves.

• Points  

This refers to the interest rate on your loan. If you choose an adjustable rate loan, for example, your points may be capped each year so that they cannot exceed a certain number.

• Down Payment

A down payment is helpful in several ways. It will lower the amount of money you will need for a home loan, it will allow lenders to see that you are responsible for paying off a mortgage, and it will move the home buying process faster. Most first time homeowners will put down no more than 20% for a down payment.

You do not want to overextend yourself by putting a huge down payment on a home because you may not have enough money to pay your mortgage, afford new furniture, or make home repairs.

• Debt to Income Ratio

This is one way that lenders will sue to determine if you can afford your monthly mortgage payments on your current income. The lender will subtract all your reoccurring debt to determine how much is left for a mortgage payment.

This is why not buying a car or spending money on your credit cards is so important when buying a home. The less debt you have will mean more available money for your mortgage payment.

• Private Mortgage Insurance

If you cannot afford to put down more than 5% on a home, you may not be approved for a loan. But if you purchase private mortgage insurance, your lender may agree to give you the loan. This extra insurance will protect the lender in case you default on the loan by paying them at least 15% of the total loan value. This will cost you a little extra each month, but it may be worth it.

• Credit Report

Before you apply for a home loan, you should obtain copies of your credit report so that you can check for errors; see how much money you owe on credit cards and loans, and to see what your credit score is. This is another way that lenders will determine if you will receive a loan.

There are three credit reports that you should obtain, because you will not know which one the lender will base their decisions on.

  

Next:   Chapter 6 - Making An Offer!

The Complete Home Buyers Handbook

Insider's Guide to Saving Money &

Eliminating Risks When Buying Your First Home!

Chapter 3 – Watching The Market

 

Now that you know more about finding a real estate agent, you should begin watching the housing market carefully in the weeks or months before buying your first home in order to get a feel for whether it is in your favor.

Watching The Housing Market

For the past year, the housing market has been favoring buyers. Soaring market values were short-lived as many people decided they just could not afford to live in certain areas because of the cost of housing.

This has caused many sellers to lower their prices. While this sounds like good news for you, the housing market can be very fickle.

Depending on where you want to live, you may end up having to pay a small fortune for the home of your dreams.

This is why watching the market, surveying neighborhoods, and finding a good agent will help you in your search.

While you should not become a slave to the housing market, you should keep the following in mind before buying your first home:

• The past market value of the home you are interested in buying.
• How much house your budget can get you in different neighborhoods and towns.
• Neighborhood value.
• How much the home should increase over time, and
• Price reductions that may be available.

Just because you buy a home for a great deal does not mean you will make a huge profit when it is time to sell it. The housing market will continue to change and since this is your first home, you may want to choose something you can pay off quickly and make a larger profit on in the future.

Also, remember that any improvements you make on the home will increase its overall value. Just don’t spend too much money on improvements. Creating a home improvement budget and sticking with it will help you make those monthly mortgage payments and other payments that will be due.

One of the biggest mistakes that first time homeowners can make is buying a home for a lot less than they budgeted and then making improvements that will end up costing more money in the end. If you can find a great deal on a home, use that extra money as a cushion in case you lose your job or are too ill to work.

Owning a home is a big responsibility. Knowing how the market is moving and spending your money wisely will help when you are creating a budget, applying for a mortgage, and deciding how much to put down on a home.

Making The Most Of The Housing Market

While you should be watching the housing market, there are other areas of interest you should be watching also, such as:

• National interest rates for mortgages.
• Building rates in your area.
• Number of foreclosures in your area, and
• Stock market and gasoline prices.

National Interest Rates For Mortgages

Even though the housing market may be going your way does not mean that the interest rates you could be paying are. In the times when the housing market has taken a slump, interest rates tend to rise in order to retain the natural balance within the economy.

The interest rate you receive will depend on many factors, including:

• Other loans
• Current credit score
• Credit history
• Number of credit cards
• Yearly income
• Owed debts
• Current interest rates
• Type of lender
• Time of year, and
• Adjustable and fixed rate mortgage

If you see housing prices dropping, you may opt to buy a larger home than you would have if the prices had been higher a year ago. While you will be saving money on that end, you may be paying more each month because of the interest rate you received.

Building Rates In Your Area

If you notice the housing market has also caused the building of new homes in your area to decrease, then you may have to enter into a bidding war in order to buy your first home. When new home construction goes down, this can mean one of several things:

• The area is no longer popular.
• The interest in buying a new home has diminished.
• People can no longer afford to purchase new homes.
• People are opting for older homes that are less expensive to heat and keep cool during the year.

While that housing slump may bring a reduction of housing prices, you should consider making a bid soon after finding the home of your dreams because bidding wars will only end up costing your more money.

Number Of Foreclosures In Your Area

When looking for a home, you should consider looking at homes that are under foreclosure. This can be for many reasons, but usually banks that hold the titles want to unload these homes quickly so that they do not lose more money than necessary. Many times auctions will be held or the home will be advertised as a foreclosure in the newspaper or online.

You should check out these homes because you may find exactly what you are looking for in a home.

Stock Market And Gasoline Prices

Even if you do not play the stock market game or own a car, you should still pay attention to these areas because they are usually what will dictate housing prices and the cost to heat and cool the home.

When the stock market is doing well many people will spend their money more freely, which will give way to higher housing prices. But when gasoline prices go up so will the price to heat and cool a home, which may make homebuyers reconsider buying until the prices fall again.

This could be a good time to buy a home if you are willing to pay a little more each month in utility costs.

The impact society can have on the housing market can be huge, and it can also have lasting affects. Buyer’s market’s are created when there are more homes available than buyers, while seller’s market occurs when there are more people who want to purchase homes than there are for sale. These housing markets go back and forth due to issues mentioned above.

In The End

Buy a home when you are ready. Many times, people will buy a home because it is cheaper in the long run than paying rent each month.

The downside to home ownership is that you have to make your mortgage payments on time each month. Very few lenders will give you more time to come up with the money.

If you miss even one payment, your home could be foreclosed upon. You will have no place to live and your credit score will suffer severely.

If you can afford to make the move into your new home now, you should not wait too long before making an offer. The housing market can change quickly and with competition out there, you may end up losing more money if you don’t make an offer after seeing a home that you like.

Rent To Own

Another option you may have is to buy the property you are currently renting or rent a property that also offers you the option to buy after a certain amount of time. This will give you a chance to see if you like living in the home and will give you time to get your finances in order.

Rent to own properties are usually older than other homes and have been rental properties for some time. This means that they may not be in great shape. If you are looking for a property that you don’t mind repairing, then this option may be for you.

When looking at a rent to own property, you should ask the following questions:

• How old is the home?
• How many times has it been rented out?
• What is the mortgage payment on the home?
• What is the rent per month for the home?
• How long will I have to make my decision?
• What happens if I change my mind?
• What happens if the home owner changes their mind?

You should still sign the proper contracts stating that you are interested in buying the home after the given time period. This will protect your rights and the rights of the current homeowner.

New Homes

When you think of your first home, you may be thinking of a brand new home. Since the housing market is favoring buyers at the moment, you may get a great deal from a builder that is developing a new housing community, or you may find a plot of land that is in an existing community. This can be a great alternative to buying an older home for many reasons:

• You will have a part in designing the home.
• You will have new appliances and lighting fixtures.
• You will have new carpeting and flooring.
• You will be able to choose all of the fixtures, carpeting, and flooring.
• You will be able to add a porch or a patio, and
• You will be able to place the home where you want it on your property.

A new home can be very exciting, but it can also be a lot of extra work. The first step in buying a new home is to find property. You should visit builders and real estate agents who will file all of the necessary paperwork, permits, and other items needed to build on the property. This can take a few weeks, so be sure to plan accordingly.

The next step is to design the home. This is the fun part where you will get to personalize your home to suit your needs.

Once you have been approved for a mortgage, the property has passed all of the land inspections, and the home has been designed, construction will begin. Depending on the time of year, you will have to wait about 3-6 months before you can move into your new home.

After construction is complete, you should complete a walk through of the home, check all of the fixtures, and have the home inspected before signing the final paperwork. Then the home is yours.

Many people hire a lawyer during the construction phase so that all of the paperwork has been filed and there are no problems during the walk through.

Buying a new home is just one more option you should consider when looking for your first home. Home construction can vary, as there are a few ways to build a home, including pre-fab homes that will be built elsewhere and delivered to your property where they will be assembled. Look into all of your options before deciding on a home that is right for you and your budget.

Using The Housing Market To Your Advantage

By paying attention to current housing trends and keeping a watchful eye on the homes in your area, you will be able to make an offer on a home that will be accepted.

While the market is continually changing, it is a useful tool for those who are on a budget, who want to find a home that is large enough to suit their needs, and will be worth more when it is time to sell it.

When watching the housing market, consider the following:

• The number of homes that are in your area.
• The number of days the homes have been on the market.
• The price of a new home compared to those that are being sold by homeowners.
• The price of renting vs. buying.
• The number of homes that are in your price range.
• The highest price you can pay when buying a home.
• Interest rates in comparison to housing prices, and
• The time of year.

Springtime is a good time to buy a home for several reasons:

• More people want to sell.
• It is easier to make appointments to view homes.
• Prices are usually lower.
• People are more willing to reduce their asking price.
• Income tax returns can help with a buyer’s budget.

There will be plenty of people who could not sell their homes in the fall or winter months and who are trying to sell before the summertime. Homeowners that need to sell their homes before a certain time are more willing to reduce the price of their homes.

While you should consider looking at a home during any time of the year, you will find that many homes will be lower in the spring to attract buyers.

This is also the time when interest rates are re-evaluated and many lenders are willing to give loans to those whose credit is not the best. Take advantage of when interest rates are at their lowest even if it means accepting an adjustable rate mortgage. You will have the option of locking into a fixed rate at a later time.

While the housing market can change, the idea of selling one’s home will not. Homeowners may choose to wait out the current housing market, but if they are eager to buy another home or move to a new place, their wait will be short-lived.

Negotiate with homeowners until a fair price can be reached. This is the same practice during a sellers market as in a buyers market. You may have to play the bidding game for a week or two, but in the end, it is the person who needs to make the transaction happen the most that will end up compromising the most.

Next:  Chapter 4:  Home Inspections 101
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