Posts by Stephen:
Don’t Let the First Time be the Worst Time
March 26th, 2010
As a first time home buyer, the process can be exciting or it can be a nightmare. If you know what you’re doing ahead of time, you can save yourself a lot of headaches and trouble. So here are a few things you should know before jumping in headfirst:
Know Your Credit Score
As you’ve heard time and time again, one of the most important things you should know before you buy your first house is your credit score. The best way to figure this out is to get a credit report. With the recent subprime mortgage crisis, credit scores are more important than ever. This means you should have a fairly good score if you expect to qualify for a decent interest rate.
Know the Grants and Other Programs Available
All first time home buyer you should learn about the many grants and programs that are available. First time home buyers can get special interest rates or perks that other buyers can’t get. However, after buying your first house these incentives are gone. So if you just settle for the first thing that comes along, you will permanently miss out on these programs.
Some grants may even help you get assistance with your down payment. These grants and programs can save you thousands of dollars over the life of your mortgage. Just be sure to investigate all of the available programs fully before you make a decision.
Know the Market Value
Another thing to know as a first time home buyer is the different markets that you’re thinking about buying into. If a certain area’s property values are falling, you should probably steer clear. If the area isn’t family friendly and you hope to have a family, you might want to check out a different area.
Ideally you should look for growing areas that are well kept and safe. These areas will make it much easier to resell your house and realize appreciation. The last thing you want to do is buy into an area that is dead or dying.
Know Your Budget
The first thing you should do before buying your first home is to establish your budget. Go into the process with a maximum total amount in mind. Know how much you can afford and don’t budge above that number. You don’t want to do become saddled with too much house and too much debt.
After you’ve done these things, feel free to get started. See? Becoming a first time home buyer doesn’t have to be a grueling experience. It can be fun and exciting for you and your family as long as you know how to make it that way.
De-Stressing Tips for Buying a Home
March 23rd, 2010
It’s true, buying a home can seem a little stressful at times. If you’re new to the process, you might feel overwhelmed with all of the things you need to do. However, if you break it down into manageable steps, it’s not really that difficult. With the proper guidance, you can get through this, relatively painlessly. Let’s look at some things you can do to de-stress:
1) Establish a Budget
Very first, figure out what your price range is. You don’t want to look at $5 million homes if all you can afford is a $200,000 starter home. You want to make sure that you get something that you can comfortably afford. With the recent sub-prime mortgage crisis, many people figured out how painful it is to buy more than they can afford.
2) Look at Price vs. Value
Make a list of features you’re looking for when buying real estate in Florida. Look for those features within your budget. Remember that the lowest price doesn’t always mean the best value. Some houses with a lower price might require a great deal of repairs. However, there might be a house that’s just a little bit higher priced, but is in much better shape.
3) Decide On a New Home vs. an Older Home
Many people have a preference one way or the other. Older homes often require more work and updating to get them to where you want. However, newer homes often have higher prices and might not be built as good as the older houses. Many new builders tend to take shortcuts that weren’t considered when the older houses were built. Decide which type of houses you want to focus on.
4) Get a Home Inspection
Regardless of what type of home you decide to buy, you want a good inspector. A good home inspector can catch some of the big problems that you’d never think about. This could potentially save you thousands of dollars on a single house. Ask around to find a good inspector. You don’t want to just pick the first one that’s in the yellow pages. Make sure that they know what they’re talking about.
Getting a Home Loan with Bad Credit
March 16th, 2010
If you have bad credit, then you may think you have no options available to you when it comes to financing a home loan. However, there are still some home loans available that might be able to suit your needs.
Understanding Bad Credit Mortgages
Bad credit mortgages are designed for people who have a poor credit score. If you have missed payments on previous loans, and if you are still working to pay off other large debts then your credit score is probably suffering. There are various levels of bad credit and where you fall will affect what interest rates you are offered when it comes to applying for a home loan. For example, if you have only missed a few repayments then it will not go against you as much as a bankruptcy would.
Bad credit mortgages will typically have high interest rates, which means that you will not necessarily want to take them out for long periods of time. That can be problematic with a home loan but may be the best option available to you right now.
How to Get the Best Possible Mortgage
In order to get the best possible quotes for a bad credit mortgage, you first need to work on improving your credit score. Each time you repay something on time or pay off your debt, it improves your credit score. Obviously, if you pay off all of your debt, your credit score will be improved dramatically. So what is the best way to improve your score?
What you may not know is that a credit card could potentially help you improve your credit score. If you get a credit card, spend a small amount on it, and then pay the full amount at the end of the month, it will help you to build a positive credit history. Just be sure that you do not spend too much on the card and you should be ok.
Choosing the Right Bad Credit Mortgage
While you are working on improving your credit, it would be a good idea to take out a bad credit home loan for a short, fixed-term period. Once you have rebuilt your credit you can easily refinance your mortgage to get a better deal. So when you search for bad credit mortgages, try to find a fixed mortgage for a couple of years and then work on improving your credit over that amount of time.
The Basics of an FHA Loan
March 10th, 2010
First of all, FHA stands for Federal Housing Administration. That means the FHA regulates these loans and offers them at more competitive terms and rates to keep home ownership affordable for a wider variety of people. That’s also why FHA Home Loans are ideal for first time homebuyers or those with less than perfect credit. However, it may not be best for everyone because they have some strict requirements.
Advantages for First Time or Bad Credit Buyers
Your credit doesn’t have to be as good to qualify for an FHA loan as it does with a traditional loan. You do have to have some credit, but you can have a lower credit score and still have a chance to qualify for a loan of this type. You can even use your utility bills or rent as proof that you will pay your loan on time. This is not accepted for traditional mortgage loans so it is a good choice for people who are buying a home for the first time.
More Advantages
More people can get these low interest loans because there are no income limit requirements. This is great for people who otherwise might not be able to buy a home of their own. The fees are lower because they are closely regulated so you don’t get overcharged. There are no cash reserve requirements and they have low down payments.
Qualifications to Keep in Mind
Even though these loans are much easier to get than a regular loan, there are still restrictions. You will not qualify if you have declared bankruptcy in the last two years. If you have filed bankruptcy before you need to have built a fair credit history since then. If you have been foreclosed on within the past three years you will not be able to get an FHA loan. But you may be able to claim extenuating circumstances and still be able to apply.
You don’t want a lot of federal debt, so it’s a good idea to pay off whatever you can. Unpaid student loans and other large amounts of debt may also keep you from getting a loan. In short, try to get any judgments against what you paid before applying for a FHA home loan. And as a side note, your wife or husband may still have to sign a form even if they are not involved in the purchase.
Stay Informed
Ask any questions you may have about your loan and always read the terms before signing your FHA home loan. If your payment is too high you may have serious problems even if the terms and rates are good. Make sure you can afford the payments before signing anything. You don’t want to lose a house you have grown to love because you can’t make payments.
Smart Moves Toward the Best Mortgage Rate
February 23rd, 2010
Whether you need a mortgage to purchase your first home or are simply looking into refinancing your existing mortgage, you absolutely must find the best mortgage rate if you want to make a positive financial decision. Let me help you by providing a few tips:
Shop around for the best rate.
Although we are in tough economic times and it is getting harder and harder to qualify for a loan (especially if you have less than perfect credit), you shouldn’t settle for the very first mortgage that you find. Instead, you have to review rates from various lenders to find the best one for you. After all, financial institutes make a tremendous amount of money off mortgages, so make them fight for your business by bringing you the most attractive offer.
Clean up any credit inaccuracies before you applying.
Since the mortgage rate that you are quoted depends heavily on your credit history, it just makes sense to improve your credit score before you apply. You should pay down as much of your debt as you can, clear up any inadequacies, and make sure you pay your bills on time. By doing this, you will put yourself in a much better position for obtaining the best mortgage rate.
Conduct research about financial institutes and consider all your options.
Currently you can obtain a mortgage rate through a bank and even a private lender. However, to find the best mortgage rate you have to really understand the fine print. A private lender may have the best rate, but you may find that once they tack on all their hidden fees that the rate isn’t really that low anymore. But just because it may be cheaper to go with a traditional bank, doesn’t mean they are going to meet your needs.
Understand the different types of mortgages and their varying rates.
There are many types of mortgages including fixed, adjustable-rate, etc and each one of them offers various rates depending on the financial product. Make sure you understand the rates involved with the various types and choose the type that is best for your personal situation, including monthly payment, loan term, and APR.
If you are a first time homebuyer, don’t miss your opportunity to take advantage of special grants and programs. If you have served in the military, make sure you look into a VA mortgage loan.
