I am buying a house for the first time?

What do I need to do from step one, like mortgages, down-payments, and other things.
Additional Details
I have been pre-approved now what?

That is a very long list. I used the following website the last time I purchased a home. I found it to be the best. http://ourfamilyplace.com/homebuyer/checklisthtml Good luck! Don't trust your agent to do the work for you. They all have friends that they recommend you do business with. The people they recommend have one another's best interests in mind, not yours.

Read this first and think it over.
http://www.breakingbubble.com/index.htm

That is really a question for the person who pre-approved you. IT is their job to inform their clients of the process of a home mortgage.

A loan application is called a 1003, and they will issue you a GFE (Good Faith estimate, with-in 3 days, that is per the RESPA laws, and the TIL (Truth in Lending). The GFE will tell you the up-front closing cost associated with your loan. The TIL will tell you the terms, rate associated with your loan. This is a estimate only - not the final - but it does help you figure things out.

This is a terrific link for first time home buying, it will explain the process to you, what to look for etc.

http://www.fha-home-loans.com/home_buying_guide.htm

http://www.homebuyingguide.org/

Other Things to Consider:

When you Decide to buy, decide on how much you want to spend, if you want to escrow the taxes and insurance. Say the taxes are 1200 a YR and insurance 800 a year (just an estimate, ok) That is 2,000 a year divided by 12 = 166.66 If you paid 1,000 a month now - (166.66) your P/I Principle and Interest would be 833.34. Now you decided on the price range you are looking into. If you have great credit, a 1 loan at 130,000 at a rate of 7 percent over a 30 year time would be 864.89 - This is just a estimate - ok -

It greatly depends if you need help with closing cost, (The seller could do Seller Help toward your closing cost). If that is the case, I normally tell my clients NOT to hackle over the price, since you are asking for closing cost help - especially if the home is thru a realitor, and the seller has to pay the realitor their fee which runs from 3-6 percent of the selling price, and you ask for 3-5 percent toward closing cost -assistance) Follow me so far??

7.375 and a 100 percent rate is 7.5 ( This is a estimate only, since I do not know what your credit score's are....There are fixed loans, , interest only loans - adjustable loans, option arms (where you pick the payment, from 4 payments, including interest only). Interest only are lower payments, but nothing is being paid on your home. Some self-employed ppl like the payment options, in a lean month when money is tight., they can pay a lesser amount.

Cost associated with your loan. You will need to pay for the appraisal up front (when it being done). You will need to pay for The Home Owners Insurance Coverage for at least 6 months (ask your lender), if you are escrowing (where it is added into your mortgage payment, than lenders normally want to see 1 year paid).

The seller can help you with up to 6 percent of closing cost. So the title fee, lender fees, underwriting fees, flood cert, etc can be paid for my the seller. Check your good faith estimate that I mentioned above.

Research on the Internet. Look at the MultipleListing Service to find houses you like in neighborhoods you're eyeing. This will also give you an idea of how much sellers are asking for listed homes.

Start interviewing agents so you'll have a good one when the time comes to start looking. Get referrals and select someone who knows your market and the neighborhoods you prefer. A good agent will notify you as soon as a home that fits your criteria goes on the market and stays on top of the listings on a daily basis and calls you the minute a good match shows up, especially in communities where homes are listed and pending sale in the same week, or even same day.

Pin down the basics, specifically the neighborhoods you like that will accommodate your family's needs, including commute to work, schools, recreation, shopping, and, most importantly, are in a price range you can afford.

Have an open mind. It's easy to start looking at houses and get discouraged because you don't see anything that matches your vision of the perfect house. But be open to a home's potential. Remember carpet and flooring can be replaced, walls can be painted, and a dreadful kitchen can be updated. Think about whether the floor plan will work for your family.

Find a qualified inspector. You'll want to find a qualified professional affiliated with the American Society of Home Inspectors or American Association of Home Inspectors to examine your Heating and central air conditioning systems, interior plumbing, electrical systems, the roof, attic, visible insulation, walls, ceilings, floors, windows, foundations, and basements are among the key inspection points. Inspections may also include appliances and outdoor plumbing. The inspector will provide a report and if there are any major problems, they can be negotiated with the seller. Or you can back out of the deal altogether

Make a list of features that are important in your home

Write down desirable locations you would consider, an acceptable price range, number of bedrooms and bathrooms, and any other amenities. Be specific. It is unlikely that you will find a home that offers every feature you desire; however, without a wish list, it will be more difficult to recognize a home that meets your expectations.

Provide the information to your Realtor

Your Realtor will look for homes that match your criteria. This will save you time – you won’t need to look at homes that don’t fit your needs and desires. Choosing the wrong home can become a costly mistake – a home which is too large or too small for future needs; a fixer-upper when you are not handy; house that is too far from work or too close to traffic; home in the wrong price range.

A proper game plan will save you time and reduce the hassle of shopping for a home. Spend a little time in advance and save a lot of time and money in the future.

Thinking, “I can’t afford a home”

Many people feel they can’t afford a home, but affording a home has never been easier. Mortgage rates are more flexible today than ever, and the tax laws favor home ownership like no other tax shelter.

Home ownership is a durable (real) investment. Although no one can say if a specific home will appreciate in value, generally speaking, the odds favor the homeowner.

Numerous unique tax advantages are available to homeowners. The thousands of dollars you pay in mortgage interest is deductible. This tax deduction alone can sometimes make owning your own home cheaper than renting with “after tax” take home dollars.

Failing to properly “screen” your Realtor

It’s likely that you don’t often interview people. Yet, in order to find the Realtor who is right for you, you may need to interview several. The quality of your home buying experience is dependent upon your skill at selecting the best qualified person.

It’s interesting that in the real estate business someone with many successfully closed transactions usually costs the same as someone who is inexperienced. Bringing that experience to bear on your transaction could mean a lower price at the negotiating table, buying in less time, and experiencing a minimal number of hassles. Your agent should be a skilled, win-win negotiator!

You need to select an agent who guarantees his/her service. You should have the right to fire the agent if you are not satisfied – no questions asked.

Agents make it their business to provide every service connected with your home search, from expert advice in the early stages through careful monitoring of your settlement. The more closely you work with your agent, the better your needs are known and the more effectively you can be served.

Your agent should have access to the MLS system – a computerized system that will assist you in locating the home that fits your needs and desires.

The purchase of your home could well be the most important financial transaction you have ever made. The person you select can make it a satisfying and profitable activity or a terrible experience. It’s your home. It’s your money. Never hesitate to ask questions.

Failing to obtain a home inspection from a qualified inspector

The job of a professional home inspector is to look over every major part of a home and write a report that judges the home’s quality and condition.

A home inspector reports on the structural and mechanical condition of the home. After the inspection, you will have the facts you need to make a decision about buying your home.

A well-qualified inspector who has adhered to federal licensing standards can spot problems that you might not be able to see. Expect problems to be clearly explained, repair expenses closely calculated, maintenance costs estimated, and a written report delivered within a day or two.

Most contracts are written conditional on the outcome of several inspections. These inspections may include several items including inspection for wood-boring insects, excessive amount of radon gas, structural soundness, and the condition of the heating, wiring, and plumbing.

When the contract is written, it should specify who would be responsible if there is a problem with the results of any of these inspections.

If well written, home inspections can create a safety valve for both the buyer and seller. If poorly written, the result can be heartbreak or law suits.

Your Realtor should be very familiar with the laws regarding home inspections. Many people have lost the home of their choice because the agent failed to comprehend this crucial report.

Not knowing your rights and obligations

Real estate law is extensive and complex; the contract for sale and purchase is a legally binding document. An improperly written contract can cause the sale to fall through or cost you thousands of dollars for repairs, inspections, and remedies for title defects.

You must be certain which repairs and closing costs are your responsibility. You must know whether the property can legally be sold “as is” and how deed restrictions and local zoning will affect the transaction. If there are defects in the title, or if the property is in conflict with local restrictions, you or your Realtor must remedy them. Otherwise, you could lose thousands!

It is your Realtor’s job to know the laws governing real estate transactions. They are involved in an on-going training program to keep up-to-date with these laws.

You deserve to have an agent who is not only knowledgeable about the transaction, but is also willing to educate you throughout the process so you will feel more comfortable.

Failing to make your own inspection

You probably would not want to rely on the seller to point out defects in a house he is attempting to sell. There may even be hidden problems of which he is unaware.

Be sure your sales contract is worded so that any “earnest money deposit” must be returned in the event the house fails inspection. If a major defect is found, you have the option to cancel the contract and have your deposit returned, bargain for a lower price to compensate for the cost of repairing the problem, or have the owner make needed repairs before the sale.

Even before you get to the point of a contract and having a professional inspector look at the house, there are many items you can check yourself as you are shopping for a home.

Structure – Basement, check the foundation for cracks or water marks. Floors, are they level? Does the roof sag?

Water damage – Look for unevenly painted ceiling or wall; mildew odor in basement; signs of re-plastering or re-tiling in just one area of the room.

Water pressure – Flush toilet and turn on both hot and cold water faucets at the same time to test.

Plumbing – Ask what type pipes are installed and their age. If applicable, ask when the septic system was last inspected and cleaned. Stand near the tank to detect odor or soggy ground.

Wiring – A 100-amp system is typical in modern construction and uses a one-inch main line; this can be seen leading to the fuse box. Appliances such as dryer or range require a 220-amp line. Notice if lights flicker or don’t work. Check for electrical outlets . . . usually at least 2 in each room.

Energy efficiency – Ask to check last year’s heating and cooling bills. Determine if proper insulation has been used.

Pests – Be alert for small accumulation of sawdust in the basement. This might indicate an insect problem. Obtain date and results of the last wood-destroying pest inspection.

First find a reputable Mortgage lender and get pre-approval (this is better than pre-qualified). This way you will know how much money you can get financed. They can also go over all the mortgage loan options available. No sense looking at homes you can't get financing for. Once approved find a reputable Real Estate Agent in your area and start looking. Some real estate companies offer first time home buyer seminars. I would attend one of those too.

Make sure you have recent bank statements, W-2's and any assets that can help you get your loan. Also, make sure you're credit is good and up to date. Your broker/realtor will ask you for these things and maybe more so be prepared. I'd ask if they have any incentives for first time buyers too.

Hook up with an experienced real estate agent who can assist you with these things.

How To Buy Your First Home - (1st Time Home Buyer Secrets Revealed)

If you're about to purchase your first home, let us be the first to congratulate you! You've made a great decision.

But before you begin that home buying journey, we want to educate and inform you. That's why we have put together this NO-COST report, entitled 'First-Time Home Buyer Secrets Revealed'.

http://www.freerealestatesecretssoutherncalifornia.com/buyer_secrets.aspx

In this report, you will discover how easy it really is to become a homeowner and finally own a piece of the 'American Dream'. Sit back, relax and enjoy this NO-COST Report.

WHY HOMEOWNERSHIP IS SMARTER THAN RENTING

- Income Tax Savings - As a homeowner, you can deduct your mortgage interest from your personal taxes. This can really add up. That's thousands of dollars per year - in your pocket! If you add up the tax savings, you might be surprised to find out that, after you factor in tax savings, you can own a home that has more room than your apartment - and still end up paying less than you are paying right now for rent!

- Home Equity - Every time you write a check to your landlord, you might as well be flushing that money down the drain. It's gone forever. But when you own a home of your own, you will be building equity in something that belongs to you. The principal you pay each month is similar to depositing money into a savings account. After many years of paying into the home, you will have a tidy nest egg saved up that you can use for emergencies, your children's education, or retirement.

- Security, Comfort, and Privacy - There is a reason people call homeownership 'The American Dream'. A home is something special that you can call you own. You can be proud to invite your friends and family over and show them 'your home'.

THE MONEY - HOW TO GET THE FINANCING YOU NEED

- Banks vs. Mortgage Lenders - You first need to understand the difference between banks and individual mortgage originators like us. Banks handle savings accounts, car loans, investment accounts, etc. Mortgages are just one of many services they provide. We're different because we only deal in mortgage loans. We sleep, eat, and breathe mortgage loans and nothing else. Would you go to a general physician to have heart surgery performed? Of course not. So why go to a big bank, when what you need is a mortgage specialist?

- Timing is Everything - It has never been cheaper and easier to borrow money to buy a home than it is right now. Even if rates go up a bit, they will still be monumentally lower than they were back in the 1980s, for instance. Back then rates were as high as 20%! Nowadays, even people with bad credit regularly get rates much, much lower than this. But don't wait too long. Rates are cyclical. They will start rising again, and you will have missed your chance at homeownership.

UNCLE SAM WANTS TO HELP YOU BUY A HOME

- Uncle Sam is Your Friend - The U.S. Government wants for you to own a home and they will go the extra mile to help you afford one. Why? Well, every time one home is built, the effect on the economy is quite significant. Think of all the people involved in the construction of a new home, for instance. Welders, Electricians, Carpenters, Plumbers, Framers, Roofers and others are greatly affected by your choice to purchase a home.

- Little or NO Down Payment - Uncle Sam has programs like FHA and VA that can help you get into a home with a low down payment, or in some cases, with ZERO down.

- FHA and VA Programs - If you read our mortgage glossary, which is available for download by visiting my website, you will discover that FHA stands for 'Federal Housing Administration' and that VA stands for 'Veteran Affairs'. Get familiar with these programs, because they just might be your ticket to the American Dream.

HOW TO DETERMINE IF YOU QUALIFY FOR AN FHA OR VA LOAN

- VA Specifics - The VA Loan allows active or honorably discharged military personnel to obtain a home loan with 0% Down Payment. In addition, the seller is required to pay a large portion of your loan closing costs!

- Do You Qualify for a VA Loan? - To determine if you qualify for the VA loan, you simply need to meet the following criteria. First, you must be either active in one of the Armed Forces or an honorably discharged military veteran. Second, you must have reasonable debt-to-income ratio. This means that your current bills (car loan, student loans, bank loans and credit card bills) cannot exceed 41% of your income.

- FHA Specifics - If you don't qualify for a VA loan, then you should look into an FHA Loan. The FHA Loan Program allows little or no down payment, depending on your circumstances. The largest down payment you may be required to provide is 5% down. In addition, the FHA loan is also very liberal, in that, it allows a 41% debt-to-income ratio (including your mortgage payment), just like the VA Program.

- Do You Qualify for an FHA loan? - If you have proof of employment, a small down payment, and a decent payment history for your other bills in the last two years, you would likely qualify for an FHA Mortgage.

- What if you are Self-Employed? - If you are self-employed, that's OK too. We will simply need proof of income from your most recent tax returns. If you can provide this, and meet the regular criteria for an FHA loan as listed above, you qualify!

ABOUT YOUR CREDIT SCORE

Studies show that most Americans would rather see their dentist than have an appointment with a mortgage loan officer. The likely reason is that they are afraid of rejection - afraid of the big bad loan officer who will stamp a big red NO on their application. This is far from reality. Remember, Commissioned Mortgage Originators are in the business of saying YES. We've heard it all and seen it all and we are willing to help you, no matter what your situation is.

- Credit Problems are OK - You might be confused about how a lender determines if your credit is good enough to qualify for a mortgage loan. Let's clear up that confusion right now. Basically, if you've had credit problems in the past, the mortgage company will look at those problems and ask the following questions:
a.) How far in the past are your credit problems? (i.e.- if you had multiple delinquencies on your credit card this year, you might not be able to obtain a loan)
b.) If your credit problem is in the past, is it likely to recur again?
c.) Is whatever it is that caused your credit problem gone, or is it still present today?
d.) How good is the probability that you will pay your bills faithfully every month from now on?

- Judgments - If you have a judgment against you that has not been satisfied, you will not be able to obtain a mortgage loan. To obtain a mortgage loan, the mortgage company will require title insurance. Title insurance cannot be applied against your loan if you have an outstanding judgment.

- FICO Score - Although lenders look at much more than just your 3 digit FICO (credit) score, you should try to keep your credit as clean as possible, because the higher the score, the better!

- No Credit History - Even if you don't have any credit history whatsoever, you can qualify for a mortgage loan. As a matter of fact, it's not all that difficult. If you have a stable income, proof of employment, and a small down payment, you too can qualify for a mortgage loan!

MORTGAGE TERMS 101

As a First-Time Home Buyer, you are going to encounter a lot of new and unfamiliar terms. You should educate yourself on the meaning of these terms. To help you in this process, we would like to give you access to the 'Ultimate Glossary of Mortgage Terms'. To access this glossary, click here: https://secure2.realssl.com/dmeade0804/glossary.aspx

GETTING PRE-APPROVED IS THE SMARTEST MOVE YOU CAN MAKE

In many areas of the country, home sellers won't even speak with you unless they can confirm that you will qualify for the financing to purchase their home. In addition, you need to make sure you know how much you qualify for so you can avoid wasting time and effort inquiring about homes that are priced above what the lender determines you can afford. Get pre-qualified. It's fast, easy and best of all AT NO COST!

New! - We are now offering a NO-COST Pre-Approval Service for First-Time Home Buyers. It's fast, easy and at no cost to you. You'll get a copy of your credit report, as well as a NO-COST mortgage analysis.

http://www.freerealestatesecretssoutherncalifornia.com

- If you qualify, we'll provide you with a certificate that you can show to home sellers to prove that you are qualified to purchase their home. We'll also allow you NO COST Access to our VIP Home Buyer Service, which will allow you to find out about HOT New Listings before even some Realtors find out about them!!

- If you don't qualify, we'll be honest and professional, giving you the same respect we would give an A+ credit borrower. We'll show you why you don't qualify and then give you a specific plan to follow so that we can provide you with home financing sooner, rather than later.

DON'T WAIT! - TAKE 7 MINUTES AND FILL OUT OUR NO-COST, SECURE ONLINE PRE-APPROVAL FORM.

https://secure2.realssl.com/dmeade0804/preapproval.aspx

P.S. - One year from now, you'll be looking back on this as the best decision you've ever made. Start living the American Dream today.

P.P.S - Don't forget that we are in the business of saying YES. We can't wait to shake your hand and tell you 'Congratulations, You're Approved!'

Your real estate agent will walk you thru everything from ehlping you get a lawyer to recommending a mortgage company. They want the commission so they will handle everything for you.

If you use a real estate agent:

First: speak to a lending company, whether it is a bank, credit union, or mortgage company. Speak to several to get an idea on rates. My realtor suggested using a mortgage company because that is what they do for business, and nothing else.

Second: choose a lender who you feel comfortable with, then sit down with them and get preapproved for a loan, based on your income and assets. Expect to be there for the better part of an hour, you have to sign your life away...including a Homeland Security sheet. Make sure you know what they want you to bring in...usually income history, and maybe bank account info, etc.

Third: choose a realtor (you kind of have to stick with them through the whole process unless there is a real conflict).

Fourth: find a house you like and is within your loan limits, and your realtor will make an offer on your behalf.

Fifth: once your offer is accepted (you may have to make offers several times before one is accepted depending on the housing market in your area), your realtor will set up an appointment with a title company to finish the deal. This is where the downpayment comes in. Bring it in the form of a certified bank check, or if you don't do that, you can have your bank wire the funds (that's what we did).

Part of this step involves an inspection of the property. The house must pass inspection for the lendor to sign off on it.

Also, you will need to arrange homeowners insurance before the lendor signs off on it.

Sixth: once your downpayment is received, the title company registers the sale at the county clerks office, and the property becomes yours. Our realtor had a guy meet us at the house where he rekeyed all of the locks for us.

Seventh: you move in finally!

Each state has their own laws...this is Utah. I know in NY, you actually need to have a lawyer. It depends on where you are.

Hopefully I got most of this straight!

Be careful first of all. But the suggested about of a down-payment is 20% of the cost of the house, this keeps your interest rate down, and keeps you from having to buy mortgage insurance...which significantly raises your monthly payment. You can get mortgages without it, but expect to pay extremely high rates. You should really try to get a fixed mortgage, ARM or adjustable rate mortgages will really bite you in the butt later since the payments balloon. It's a good idea to get a lawyer to keep from the mortgage company swindling you, but it is not absolutely necessary. I would suggest it though. Make sure that when you go for your mortgage that you have these documents ready: your last 3 months check stubs of all parties signing, you will have to fill out forms proving your living arrangements for the last two years. If you rented, they will want them to fill it out. Your last 3 months bank statements. Employment history for the last two years. I am sure there are others, they seemed to keep coming up with something new every other day, but I can't remember if there is anything else. Of course, you will have to fill out a loan app. You will have to pay for the first year's insurance before closing or have it included in closing costs. Closing costs typically vary depending on the amount of the house you are buying, your credit, where the house is located, etc., but our closing costs where close to $4000. Ours included the insurance though, and we had poor credit. So expect between 2000 and 5000. They usually say it could be up to 1% of your house cost though, so be prepared. It's good to be prepared to go to closing with 21% of your house's value to cover down payment and closing costs, but it is not always set in stone. There are many different type loans for everybody out there. Just do your homework and you will find what you need. We went with Wells Fargo Home Mortgage, they are one of few that will give mortgages to poor credit individuals who have to money to put down or for closing costs. I really don't suggest taking that route though, it's VERY expensive. Wells Fargo was good, but they will give you the run around. Look at many different mortgage companies before making your decision. First talk to you own bank, they are usually the best to go with. Good luck. Buying your first house is exciting, but it is a REALLY big pain.

Hopefully you sat down with a mortgage broker/lender and discussed how much you feel comfortable borrowing. Based on that number, you get yourself a real estate agent to show you a home for around that number.

If you live in Southern California, contact me and I will help you out. I, or one of my agents, will give you part of our commission to you so that you will have some money at close of escrow as well. I am also a mortgage broker and can help you get a loan or answer any questions you might have.

Regards

Get Pre-qualified for a loan!
Decide what kind of payment you would be comfortable with. Then, I would advise that you pull your own credit scores first, and then shop around with them. Based off your preferred payment and credit score shop to see who will give you the best rate and the most money. Never settle with the first loan presented to you. Shop banks, mortgage brokers, your credit union, etc. But be sure to SHOP AROUND! Most people will settle with the first person they talk to. There's always a better deal out there.

Once you've taken care of where the money is coming from, shop around for a Realtor. The best way to find a Good one is to ask around. Ask family/ friends/ coworkers who had an exceptional experience with a Realtor. Once again SHOP AROUND. Never settle with the first one to come around. A good Realtor will walk you through the rest of the process and take care of most everything else. They should keep you well informed, be a great listener, not waste your time, and be trustworthy. We Realtors are a dime a dozen though, and just as in every other career, there are those who are great and those who are... well, collecting a check.

GOOD LUCK!!!

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