When looking for homes as a first time home buyer can be a very time consuming affair. This should not be a deterrent for you and your family at all. Anything worth doing is worth taking the time for and being patient through the process because the choices that you are about to make, you are going to have to live with for quite a while. It doesn’t have to be one big fast paced ball of stress. You should understand ahead of time the amount of time you will need to spend and what to expect along the way.

One thing that first time home buyers sometimes try to race though is the actual looking at different types of homes. You should look at as many different homes as your schedule will allow and then try to fit in a few more. Now we are not trying to imply that you should waste your realtor’s time and look at houses that you are not interested in. What we are saying is that the more houses that you can look at the more you will be able to figure out what you like and don’t like in homes. You may already have a good idea about that but. It may help you to better decide what you like when it is applied to a home that you are looking at.

You might even want to look at some homes that are above and below your price range to see what is on the market. It might help you get a feel for what amenities that you can afford and what is out there that might be a little out of your price range but, with some negotiation it might fall into your price range.

Another thing you will want to do while looking at different home is try to figure out what the cost per square foot is at the homes you are looking at. It will give you some insight to figure out if you are paying for location like the neighborhood or if you are paying by size.

To conclude, if you are a first time home buyer or if you are just looking for some home loan tips. Always take your time and try to look at as many properties as possible before you try to make a choice on where you would like to live. You always need to keep in mind that choices when buying homes can stay with you for a very long time. The only way to avoid that is to take your time and really think out your choices.

You may have heard the term short sale before and may have not wanted to be embarrassed and didn’t ask what it meant. First time home buyers may have never heard this term. You might know what it is but don’t know how it applies in a real world situation. Now a short sale can be defined as when property values fall and the sellers do not receive enough money from the buyer to pay off ones current mortgage and if and only if the lender can agree to take less than what is actually owed to them.

Now don’t get us wrong, there are always exceptions to every rule but, short sales are very rarely profitable for the buyer. It may seem like it on the surface like it is a great deal but, most buyers would be better served by getting a new home that has not gone into default.

Now you will probably not hear a real estate agent or broker tell you that you shouldn’t buy a short sale. The reason for that is because they are the ones that make money on the short sale not the seller or the buyer. Below we will list some reasons as to why you should not buy a short sale whether you are a first time home buyer or not.

Lenders can change conditions on short sales is one of the first reasons why you should not buy short sale. The lender will make sure that they will reserve the right to have the ability to change the terms of the short sale at the last minute. They can make changes to the terms if the market has any sort of fluctuations. Also, lenders will always have lawyers at the ready and most buyers and sellers do not.

The short sale closing process can take an extremely long time and if you have contingencies during this time, you are probably going to miss you deadlines. The seller’s lender will be calling the shots and not anyone else. If you are timing it with the sale of a current home, you can forget about it because it will not close in time.

The market values of properties can work against you in a short sale more than you would think. Lenders are not fools and they are completely aware of what the market values are at any given time. If the current lender thinks that they can get a better deal on the home in foreclosure then that may wait it out. The only real time they will accept a short sale is when the short sale price meets the market value.

Another reason is that the seller had paid too much for the home to begin with. If the home sold for 500,000 just a short few years ago and now is for sale 100,000 less, it does not mean that the buyer has just gotten some free money. It means that the seller has no equity at all in the property.

Not too long ago banks were somewhat eager to lend out their money in a good market and sometimes over mortgage the home. What that means is that the loan is greater than the value of the property. Even though it may not be legal banks may tell the appraiser of the home to try their best to make it the amount that the owner wants to borrow. This can be a bad situation for everyone.

Now these are just a few of the reasons as to why a short sale may not seem like the good idea you thought it was. There are plenty of other reasons as well but, there are exceptions to the rule and a short sale can be beneficial to you whether you are a first time home buyer or not. Just make sure that when you are buying a home you do your research and never hesitate to seek out help from friends as well as real estate professionals.

There is a bunch of situations that one can find themselves in and if they make a mistake, usually the mistake is fixable or in some situations reversible. Unfortunately for you, buying a home is not one of those situations. Mistakes can be very costly and you may end up having to live with them for a very long time. In this article we will cover some of the bigger home buying mistakes first time home buyers or even seasoned home buyers can make and how you can try to avoid them.

One mistake that might be obvious to some and not to others is buying the wrong home. Part of the reason for this is because home buyers are so concerned with getting a new mortgage that they never come up with a list of what they are looking for in a home like what types of features the home may have and what type of neighborhood the home is located in. Really get down to the nuts and bolts of what you are looking for and are not willing to compromise on. There have been stories that people have compromised about the number of bathrooms only to find out that when they move in there is not enough for the whole family to use without maintaining some sort of schedule. That is just one example of this. Not knowing what you are looking for could really curb you excitement when it comes time to close on the house.

Another mistake that some home buyers make is not trusting the people they have hired to deal with the real estate transaction. Examples of this are not trusting your real estate agent or real estate lawyer. There are many instances where buyers will not completely trust their real estate professional and won’t reveal all of their feelings and concerns about buying a home. First time home buyers seems to suffer from this more than families or individuals who have held mortgages and home loans in the past. What needs to be understood is that these real estate professionals have probably seen and heard it all and they can give you some insight about the processes of trying to buy a home and becoming a first time home buyer. If you do not feel like you aren’t completely trusting your real estate professional, either express that to them and try to reach some common ground or go try and find a new one that you can really put all of trust into. Not trusting your real estate professional is a waste of yours and their time.

Thirdly, never alter you financial situation even in the least bit prior to closing on your new mortgage. Once you qualify to buy a new home it does not mean that everything is set and stone and you cannot lose your qualified status. If you purchase a new car or any other items that carry credit with them, you could end up having the underwriter of your loan throw out your new loan and deny the whole thing. It could also mean that you could lose all of your earnest money and be in a worse situation then when you started.

To conclude, being a first time home buyer or anyone buying a home can be loaded with a lot of emotional highs and lows. Just remember to keep a good head on your shoulders and try to not to make any of the big mistakes that was mentioned in the article above.

One of the questions you may ask yourself when you are a first time home buyer is, how much am I allowed to borrow? The most obvious thing that you will need to consider before you can answer this question is your personal finances. How much do you earn compared to how much you owe will help you figure out how much you will be able to borrow.

To begin, you will need to figure out what your gross income is for a month. This will include anything that will show up on your tax return. You can also use any alimony or lottery payoffs as sources of your income as well. Another asset that can be used is real estate and stocks if they are producing an income for you. There are other things that can qualify but, you will want to speak with a loan officer for more specific questions pertaining to your situation.

The next thing you will want to go over is your monthly debt load. A monthly debt load is your monthly financial obligations like credit card payments, installment loans, car loans, personal debt or any ongoing monthly bill you may have to pay. If the debt is ongoing then just use the minimum monthly payment for your calculations. Another thing that you should consider is that if you are going to pay off something in full over the next six months then you will not need to consider this part of your debt. Once you have all of the figures combined, you will know what your monthly debt load is.

Most lenders by practice do not want you overload you so you cannot repay everyone that you owe money to. Every lender has a different formula that they may use but, they all get their numbers based off of some rough ideas.

In a typical month, all of your housing expenses including taxes and insurance shouldn’t go over about 28% of your gross monthly income (not your take home pay). If you are a little unsure of your tax and insurance expenses then using 15% would be a good estimate. The rest of it will go towards the interest and principal of your mortgage.

Now if you take your new monthly housing expense and add your total monthly debt service those two combined should not go over about 36% of your gross monthly income. If you are in a situation where it does, there is a good chance that you will be denied by the lender. Now with that being said, there is some situation where the lender can be flexible but, that really depends on your situation. Some examples are if you are borrowing less than 80% of the total home value, or if you have a friend or family member whom is able to help cosign with you.

Something to keep in mind is that there are literally hundreds of home loan types out in the market today and each one carries its own set of rules and guidelines. So make sure that you don’t get discouraged easy because there is a loan and lender out there for you.

In closing, being a first time home buyer can be a very overwhelming experience and you might not even know where to start. A good place can be trying to figure out what your income versus debt ratio is. Once you are armed with that knowledge it can be a good place to get your feet wet and continue on your home buying journey.

First time experiences can be a very stressful because of the unknown. You only get one chance to be a first time anything whether it is for purchases or experiences. Now when you decide to become a first time home buyer you need to understand that there is a lot of money on the line here but, that does not mean that it cannot be a wonderful and fun experience for you and your family. It can be a time where it brings everyone together because everyone is learning about the same things like trying to find a good neighborhood, what they want in a home, and many other things that can initiate conversation.

Make sure to take your time when going on your first time home buyer journey. This is not something that needs to be rushed along. This is something that you should try to be meticulous about while making sure that it is not a painful process that you just want to get over with.

One of the best ways to start the process is to give yourself research projects about the types of homes you are looking for and what types of areas are the home located. Give yourself some time to look over the neighborhoods and see what type of community they have going on. Is it one where everyone knows each other? Or is it one that no one knows each other but, everyone is very cordial and helpful. Try and see if you can find out the numbers about the crimes rates of the areas that you are looking at. Look into the schools and see what the average home values are and if they have gone up or down over time.

Also, don’t forget to start looking into mortgage programs that you may qualify for as a first time home buyer. This will also give you an opportunity to try and start developing relationships with lenders, mortgage brokers, and real estate agents. This can really help you get your foot in the door (no pun intended) with people that can help you with your purchase and the better relationship that you have with them the harder they will try and help you achieve your goals.

Just try to remember that first time home buying is only going to be as stressful as you make it. It can be a fun and very educational experience. There are some first time home buyer programs out there that can help you with down payments and what not but, try to make it the best experience that you can because the decision is something you are going to have to live with for a while.

One thing that used to play into your advantage when you are a first-time home buyer is that you don’t have to worry about selling a home before you can buy one. Recent changes to regulations and laws have now shifted things dramatically making it harder and now more expensive to become a first time home buyer.

It wasn’t really that long ago when first time home buyers accounted for almost half of all home sales. Those numbers have been in decline ever since that high of a percentage. Most experts will tell you the cause is the rising costs of fees, and rates. On top of all of that more and more lenders are now also requiring bigger down payments and new changes from congress that causes mortgages to become more expensive.

All of these recent changes are the because of the huge losses that the banks and other lenders have accrued since the housing market bottomed out. These companies lost billions because of the subprime mortgage fiasco. So now the byproduct of all of this the banks and lenders charging higher fees to try and make up for some of those losses. Another reason for the higher rates is because they are being used as a deterrent to risky borrowers to try and keep the numbers of people that default on their loans to a minimum.

Now with all of that being said there is still opportunity available for first time home buyers to acquire a mortgage. Interest rates are still low for now and home prices are still fairly inexpensive. There are still some compelling reasons to wait but, if you want to move now and buy a home, here are some of the newer rules for first time home buyers.

One of the first new rules to be aware of is that you will need to put to come up with more money to put towards the down payment. This is something that you will want to do. The reason for this is because of the insurance fees on the federal-issued mortgages having doubled in almost a year. It will be harder if you are a first-time home buyer because of all of the money you will need up front. This may be the time where you will want to look for different ways to get some cash. There are still grants available but vary by state. Also, you may want to seek help from a family member or a friend to try and give you a cash gift or co-sign on the mortgage with you.

Flipping a home has now become a thing of the past. If you are planning on buying a home then a question you will want to ask yourself is, “How long am I willing to stay at this home before I will want to move again?” If the answer is any less than ten years then you might want to reevaluate whether or not you will want to buy this home. Most experts predict a very slow growth in the housing markets over the course of the next ten years so it will be much harder to break even or make a profit on the home if you are not willing to wait that long. Another thing to try and avoid is buying a home that will require a lot of work to be done on it. Since the housing market growth is very slow right now it will take you twice as long to get your return on investment on your renovations.

Now there are many other “newer” rules for first time home buyers out there and we hope to cover them over the next couple of weeks but, we felt that these were the biggest ones needing consideration while you continue on your home buying journey.

There have been large groups of potential first time home buyers that have been completely afraid of the downturn in the housing market. In some cases they do have a right to some of those fears but, for the most part now is one of the best times to buy a new home. So, now a byproduct of this is that a lot of those potential first time home buyers chose to become renters instead, therefore driving up the prices for rentals. Also, there are some costs that are out there that can make renting no more of a bargain than getting a new mortgage. Cost of renting is going up and that should make buying a home much attractive.

Vacancy rates have continued to decline over the past couple of years. The national average has dropped from seventeen percent to six point six percent. Average monthly rents have gone up as much as sixty dollars a month in some places and in the bigger cities the increase is even higher.

Once you wrap your head around that, also consider that the rental market is going to get even tighter before it starts to top out. Right now the government is encouraging people to rent places rather than purchase them and get a mortgage. Now with that being said renting can be a good option for some people. It can be a very attractive option considering how uncertain the current job market is currently. Also, it can be a good option while you wait for the housing market to recover as well.

Now that you have a lot of the facts about the rental market itself, we will now cover some of the lesser know costs that might come up and surprise you.
One cost that a lot of people do not budget for is storage costs. If you are renting and don’t have a big enough budget to afford the space you will need then you are going to have to put some of your things in storage unless you can find a family member or friend that will let you store your items at their place. There are some storage places that can charge up to almost $300 a month for rent. Also, because so many home owners were foreclosed upon it has made them have to use storage units also. Foreclosures as a whole have helped the storage unit industry tremendously. Storage unit prices will vary by location so make sure you check your local area to see what the going rates are.

Renters insurance is another cost you will need to consider before you make the choice to buy or rent. There are more landlords starting to require their tenants have renters insurance. These policies can cost from $100 to $300 a year. It usually will cover possessions and hotel nights stay if something was to happen to the rental.

The last point to make on this topic is to check that the rental market hasn’t gotten so out priced that it is cheaper to buy a home rather than rent. There are places especially in the bigger cities that there may not be any spots available for rent and if there are some open they might come at a premium cost to you because of how rare they are. If you go look at the numbers in your area and see that you can save more monthly by purchasing a mortgage then you should really consider your options over the long term.

To close, because of the downturn in the economy what we have been taught about the housing market has drastically changed. Renting now can be much more expensive to you than in any other time because everyone flocked to the rental market once the recession happened even though most of it was not by choice. So if you are thinking about becoming a first time home buyer or just trying to get a new mortgage but, think renting is better savings options then make sure you do your research and due diligence and you might be surprised to find out the statistics.

What should you do when you are a first time home buyer? What should be your first step in this long process? How can I make acquiring this mortgage a pain free real estate transaction? Finding a good real estate agent or broker is one way to getting your start and trying to achieve that painless mortgage transaction. Unfortunately that will spawn another question, as a first time home buyer how do I find a good real estate agent/broker? That is a more complicated answer because the best agent/broker for you doesn’t have to come from the biggest company. They don’t even have to be the best at the company that they work for. What they do need is make sure they listen to you, knows the market very well and conducts his or her business in a professional and ethical manner.

One of the best and easiest ways to find a real estate agent is to ask your neighbors, friends, family, and even your coworkers about whom they have used. The way most real estate agents can keep their business going is by referrals. Customer service is key, if you are expected to be a good real estate agent. Look for an agent whom makes customer service their top priority and tries to go above and beyond for their clients. If they are really good they won’t be hard to find because their former customers will be singing their praises.

Open houses are a good way to find a real estate agent as well. It is a great way to see them in a working environment without having to sign a contract in a cramped and stuffy office. You don’t have to be interested in the home to go to the open house; you are more interested in the real estate agent. Go ahead and collect some business cards and make some notes about them if there is anything worth writing down. Were they polite to you or were they rushing people through like cattle? How were they with trying to sell the home? Did they use a bunch of technical terms just to confuse you?

Try and take note of for sale signs and which agents are selling the homes. Watch and see if which agent is selling the homes the fastest. Also look and see if a house is under contract but then something falls through and the house is for sale again. If you can find an agent that is moving homes quickly then it may be an indication that they are able to meet the needs of the client better.

The internet is another place to find good real estate agents but, it may take a little more of sifting through all of the information and discovering what is true and what is being pay for by advertising. What I mean is just because a website has a link to real estate companies doesn’t mean that they endorse the company. They could be paying to have those links there. If you find a company that you like, then try and look for an agent that you think might be good and then do some more research on them. Facebook is a very good source for this.

In closing, there are many ways to find a good real estate agent and the above article just mentions a few that you may not have been thinking about. There are other ways to find one but, make sure to be patient. A good real estate agent can make your first time home buyer experience a good one but, one that is not compatible to you may make it a horrid experience.

If you have reached the point of seriously considering getting a new mortgage whether you are a first time home buyer or not there some important items you need to keep in mind when searching for that mortgage. Remember that mortgage refresher is never a bad thing because the real estate market can change so fast. So, whether you are a first time home buyer or someone whom has help multiple mortgages, we hope you find this information useful and helpful to you, even if this may be a refresher for you.

One of the biggest mistakes people make when trying to secure a new mortgage is that they over borrow. There is no problem to trying to buy the best home that you can possibly afford but, you will want to make sure that you are comfortable financially. Just because a lender says that you can qualify for a certain amount doesn’t mean that it will work with what is in your budget.

Make sure that you review your budget frequently while you are looking for that new home loan. Keep an eye on whether or not you need to make changes to it. If you are able to budget well and stay on track then you will be able to get the best bang for your buck and all of your money won’t be drained into your new mortgage.

There is going to be a lot of documentation you will need to come up with before you can go to closing. Also, it may seem like everyday someone is asking for some new form that you don’t have a copy of. Look around on the internet for some mortgage document checklists. The lists are pretty thorough and you will need all of the documents at one point or another so why not try and gather them all together right up front so you don’t have to play beat the clock when it comes to getting documentation submitted on time.

Closing costs are one of those expenses that can come up and shock you if you are not prepared for them. They can be financially devastating if you get surprised by them and have to scramble for cash while trying to acquire a new mortgage. One thing of note about closing costs is that they will be paid in certified funds and the money cannot be borrowed. What are usually included in closing costs are appraisal fees, credit report fees, origination fees, and some others. Depending on your area and loan these can range from three to five percent of your mortgage amount.

There is a big misconception among home buyers that if you get a shorter term mortgage then your payments will be in a place that they cannot afford. This may be true in some cases but, you will never know unless you take the time, effort and energy to find out. There are fifteen to twenty year mortgages out there that can help you pay out less in interest over the term of the mortgage. If you can’t make the payments try taking a thirty year loan and then have your lender work out a payment plan for fifteen to twenty years (off the books) and try every month to make the higher payment. This can help you build equity fast and help take off some of the costs of interest in the long term.

If you are going to be a first time home buyer you might have the urge to jump all in and buy the biggest best house that you can afford. You may want to rethink that decision and at least consider some alternatives to that big whopping home. You may want to map out an upgrade plan rather than trying to get the biggest and best first. You don’t need to have a lawn and driveway at first so why not think of a condo or a townhouse?

There are a large number of families that are turning to these types of properties because of the need to stretch their budgets. One thing that you can find an immediate savings is outdoor maintenance. This is one of those hidden costs as a home buyer that you may not have thought of during your financial planning for your first mortgage.

Remember that the biggest and best advantage that both townhomes and condos give you is price. Now don’t get me wrong there are some very expensive condos out there but, that is not what we are talking about now. It can’t be stressed enough how much money you save by NOT having a yard.

Another nice little surprise about these times of homes is that your maintenance fee for both the townhome and the condo will go toward your monthly housing expense. For the most part this is not the case with traditional single family homes.

A downside to this however is that you do have to live under the rules of the association that may govern the community. They may not be pet friendly or have some other rules that may or may not fit for you. This could have an impact later when you try to sell and move to a new larger home. It does have its perks though because there may be a gym or a pool that you would not be able to afford if you bought more of a traditional single family game.

Some advantages of a townhome over a condo are that you can live your life a little more independently. You might have a little bit more of a yard and you will have your own front door. You also may only share one wall with your neighbors rather than all of them. Also, you will have your own parking space rather than try and hope there is one left by the time you are done with work for the day.

What it really boils down to is a lifestyle choice. Can you live in an apartment or a house? How close to your neighbors do you really want to be? Can you put up with an association telling you about rules? Do you want to be more independent? You really need to ask your selves these questions whether you are a first time home buyer or any home buyer for that matter. You might be able to answer yes to these questions while you are younger and then maybe no once you get a little more settled in your ways. Either way, understand that this will be a mortgage for you that you will be responsible for.