Buying a home or building a home

Tips for buying a home or building a home.

Buying a home or building a home is usually the biggest buying decision a person makes in his lifetime.

It behooves one, therefore, to know all he can and to prepare as best he can to make his home buying experience as pleasant, profitable and as stress free as possible.

Hence, the intent of this page is to help make your home buying experience as stress free and as rewardingly as possible.

Outlined below are some tips for buying a home and some questions to ask yourself before buying a home or building a home.

When buying a home, the very first thing you must determine, before you apply for any credit or sign any contract to buy or build a house is whether you are ready for such an important undertaking.

Before buying a home, there are some preliminary actions you should take.

First. Is your credit score good enough to get you the credit you want and also at a favorable interest rate? It is important that before you apply for credit you are aware of what is in your credit file.

This can mean the difference of tens of thousands of dollars in interest payments over the life of the home loan.

Before buying a home, check your credit score before applying for a home loan so you can challenge and correct inaccuracies and pay up or bring current delinquent payments.

Also, if you have problem credit click here to learn more about credit repair.

Second. Before buying a home ask yourself: Can I afford it?

To help you decide if you can afford buying a home and at what cost, look at the list below to help you figure out whether buying a home and at what cost is best for you:

• When buying a home, you need a down payment. The down payment is a percentage of the value of the property. You are required to pay it up front and it can range from 3 - 20% of the property value.

  If your down payment is less than 20%, you may be required to purchase mortgage insurance.

• You need the closing costs. Closing costs include points, taxes, title insurance, financing costs, and other settlement costs. These costs generally range between 2 - 7% of the property value.

  When buying a home, you will be given an estimate of these costs after you apply for a mortgage.

• You must be able to prove that you have the money? This proof is usually satisfied by statements and letters from your banking or other institution that holds your account.

  Your proof will verify the amounts of money, how long has it been there, and the age of the account.

• Are you gainfully employed for the past two years and have adequate income?

• Figure out up front how much mortgage you qualify for . As a general rule, a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income.

• Do you always pay your bills on time?

• Is your total debt, including credit cards and car loans, manageable?

• After you pay the down payment and closing costs, can you afford the mortgage and other expenses, such as utilities and repair costs?

• Do you plan to live in the house for at least five years so that it builds some equity?

• If you can satisfactorily meet the requirements above before buying a home , you then need to check out a home loan and if you are building a home, also check out home builders.

Once you decide that buying a home is right for you, it’s time to secure your home loan.

Again, the tips below for buying a home or building a home are intended to provide information on your selection of a home loan.

By now you should have a general idea about how much you can afford but it is important to know exactly how much mortgage a lender is willing to give you.

That means that it is a good idea for prospective buyers to consider getting pre-qualified or pre-approved before they begin the process of buying a home and start house hunting.

What's the difference between pre-qualification and preapproval?

Pre-qualification. After reviewing your income, assets, and liabilities, the mortgage lender determines an appropriate loan amount. With pre-qualification prior to buying a home, you'll narrow your search to those properties in your price range and make buying a home so much easier. This service is often provided free by mortgage lenders.

Preapproval. After reviewing your income, assets, and liabilities, the mortgage lender commits to a specified loan amount. Although you'll usually have to pay some basic fee for this service, the process will likely lead to increased buying power in buying a home by making you ready to make an offer.

Some of the most common mortgages available today include fixed rate, adjustable rate, and balloon.

• Fixed-rate mortgage. Probably the most common mortgage is the fixed rate. A homeowner knows exactly what the payments will be during the length of the loan, whether it is 30, 25, 20 or 15.

  When buying a home, the fixed-rate is a good choice when interest rates are low and if you expect to live in the house for at least several years. Because the interest rate never changes, the monthly principal and interest payment never changes either.

• Adjustable-rate mortgage (ARM). With the adjustable-rate mortgage, you start with relatively low monthly payments but the interest rates fluctuate over the life of the loan.

  They begin with a relatively low interest rate which is readjusted at agreed upon intervals, typically increasing no more than a maximum of 2% in any one year and 6% over the life of the loan.

• Balloon mortgage. Monthly mortgage payments are based on a 30-year schedule, but the entire mortgage balance becomes due at the end of the five or seven-year term.

  This is usually not a realistic choice for most people who are buying a home to live in.

  If you decide to keep the house, however, you may be able to reset your interest rate for the remainder of the mortgage period.

Before buying a home shop around for the best mortgage rates. Even a fraction of a percent can make a big difference in your mortgage payment.

Click image for

Land in Lehigh Acres, Florida is an affordable means of investing.

However, getting in quickly is important as land prices are getting ready to explode.

Home / Top: buying a home / Home Loans / Credit Repair / Home Builders / Contact Us