1. Have an idea about the amount of money that you can afford to spend on a home buying. Looking closely at your monthly income and expenditure is a good idea to have a proper insight about your affordability.

2. These days, getting into debts is pretty easy. When you are applying for a mortgage loan, be sure that the mortgage lenders would review your credit report minutely. If you have a huge debt on your credit card, your credit scores might have been damaged. While buying a house, if you have lots of debts on your credit card, it will become more difficult to afford a house. If you have had any credit related problems in the past, you would have to pay the higher rate of interest. This will eventually increase your monthly payments. So, it would be a wise idea to go for debt settlement before going for house hunting.

3. While searching for homes, carry with yourself, a pen and a writing pad. Take notes of designs, any particular feature that you liked in a house. Note down the surroundings of the home, location etc.

4. Since, buying a home is an investment, invest wisely. Home value depends on the economic conditions. It may fluctuate with the ups & downs of the economy.
5. Still, it will be wise to know the estimation of the worth of the home in future.

6. Talk to several mortgage lenders. Compare costs and interest rates; negotiate with the seller, to get a better deal. Get yourself a pre-approved loan.

7. Since, you are a first time buyer, keep in mind the home owners insurance and taxes while calculating the monthly expenses for a home mortgage loan repayment. Remember that sometimes, the taxes can be double the amount of mortgage value.

8. The details regarding a home buying can be mind boggling sometimes. A very good idea is to use a real estate broker. Being a professional, he can guide you through the process of home buying, thereby making the experience a lot easier on you. He will be able to guide you through all the important things like the affordable price range, the safety etc, that you need to consider before buying a home. This will save you money as well as your precious time, as you would not need to drive around the town for house-hunting. When you zero-in on a particular house, the broker can make deals with the seller, to save you money. He would be able to explain you the pros and cons of different types of mortgages, answer all your queries and guide you through the complicated paper works. The most amazing part is that you don’t have to pay the broker any money at all! The payment to the broker is to be made by the home seller.

9. Finally, have patience. Finding a perfect home to fit your family’s requirement may need some time.

As mentioned at the beginning of the article, buying a home for the first time can be a scary experience, unless you follow the proper approach. Be honest about your affordability, research amply and then commit for a home loan. If you follow the right steps, I am sure, the process of buying and eventually moving into your dream home would be a memorable one.

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Credit score requirements are higher, down payment amounts are higher and underwriting guidelines are much stricter about income and debt.

If you have been working on improving your credit scores but still can’t qualify because the lenders raised the bar on you, then consider doing what this young lady did.

This is a true story but I’m going to call this young lady Maria (not her real name) to protect her privacy. 

Maria had been struggling to get her debt paid off and to improve her credit scores since her divorce a few years ago.  She had a young son to support as well as herself.

Her son would need to start to school next year and she wanted to get into a neighborhood with a better school system for him to attend.  Her credit scores were not yet where they needed to be to qualify for a traditional mortgage loan.

She began to look for homes for sale by owner and asking them if they were willing to do a lease option for a year or two until she could get her credit scores where they needed to be.

After much seaching she was able to find a seller who was not only willing to do a lease option but would hold a mortgage on the property for two years and amortized over a 30 year period.  This would not only allow her to have time to improve her credit rating but would give her the opportunity to take advantage of the first time home buyer tax credit.

Because the loan was amoterized over 30 years the payments were just a little bit more than she had been paying in rent for their apartment.  And the house was in a much nicer neighborhood and in a good school district for her son.

She much refi the mortgage by the end of two years but that should give her plenty of time to get her credit rating in good standing so she can qualify for a mortgage from a traditional lender.

These opportunities are not necessarily easy to find but this is proof that they are out there.  Sometimes, you have to suggest, or sell,  this scenario to the seller yourself. You may have to make a lot of calls but in the end it can be worth it while you can still buy a house for a good price.

It would be good to get a copy of your own credit report and take that with you to talk with the owners.  You can point out the things that you have corrected and what you are doing to correct anything that is still holding your credit scores back.

Show them that you mean business when it comes to improving your credit scores and that you will be able to refinance your mortagage with them at the end of the one or two year term.

Buyers must have an approved contract by 4/30/2010 and must have closed on the new home by 6/30/2010.

The tax credit amount is 10% of the purchase price up to $8,000 for First Time Home Buyers and $6,500 for Move-Up Buyers.  Move-up buyers must have lived in there current home for five years out of the last eight years.

If you do not know if you can qualify for a mortgage on a new home and need to find out visit Tri-Merge  Credit Score Report for more information and help.

This is a wonderful opportunity that probably won’t come back for a long time; if ever.  If you really want a new home, then this is a great time to buy.  Not only is the tax credit available to many, home prices and interest rates are still very low. 

If you have credit score problems that are holding you back then you might want to learn how to solve that problem.  Visit: http://www.creditscorefreedom.com

Get off the stick, time is running out for you on all fronts.  Not only is the tax credit expiring, interest rates are beginning to inch slowly upward.

This week I was working with a young lady that had found an owner that was willing to hold a mortgage for 2 years on a home that this young lady wanted to buy.  The buyer’s credit scores where not sufficient to get traditional mortgage financing at this time.

The rub came when she when to get homeowners insurance.  She first applied with a well known insurance company where she had previously carried a renters insurance policy.

Because of her credit rating and the fact that she had had 2 theft claims against her renters insurance they simply would not write the homeowners insurance policy for her.  The two theft claims had been filed but she never followed through on them and the insurance company never paid out any money. 

Had her credit rating been better the insurance would have cost her around $650.  She got quotes from 2 other insurance agencies.  One was $2300 and one was $1350.

After shopping around she was able to get coverage for a little over $800.

Just wanted to use this example to help everyone understand that your credit rating impacts a lot more than just getting approval for a loan.

If you haven’t checked your credit history file lately then you might want to take this time to View Your Credit Report.

Some lenders that take a look at your credit scores just retrieve a credit report on you from just one of these bureaus, but you do not know which one they even use unless you ask them.

When you or a lender retrieves your credit history from all three credit bureaus then it is called a tri-merge report. That is because your past credit info will be retrieved from each fico score bureau and merged into one report for a creditor to evaluate.

In addition they’ll be provided with your fico score from each of the fico score bureaus. 

Each credit reporting agency(Experian, Equifax, TransUnion) has their own scoring algorithm. What’s more, lenders might not file your credit history to every one of the credit reporting agencies.

Consequently, you will find that you have a dissimilar score reported from Experian, Equifax and TransUnion. This is because they’re working with unique info that’s known to them about your credit history as well as applying a different scoring algorithm.

If you apply for a home loan in order to purchase a property then your tri-merge credit report is retrieved by the home loan lender to decide approval for any home loan. Lenders generally use the middle of the three scores to initially see if you can begin to qualify for the loan and then after that they evaluate the rest of your credit items to check your credit rating worthiness.

If you apply for a cellular phone or go to obtain an automobile you may find that the company only retrieves your report from a single fico bureau and also just looks at one of your fico scores to figure out if they will be able to approve your application.

Given that each creditor does not report to all 3 of the credit reporting companies you may find that you have a good or derogatory item on one report, but not another, which will impact your fico scores in a excellent or bad manner.

Consequently, if you want to really know what is being totally reported about you to your credit history then you should retrieve a tri merge report and check all of the details in addition to all 3 of your scores. This will give you the best view of your total credit history.

Visit these links to learn more about a tri merge credit report and how to use that information to help protect your credit rating scores. In addition you will be able to learn about whats a good credit score.

After a mortgage holder has a certain amount of equity in their home then they can request that the lender quit charging them PMI.  This equity amount is usually 20-22% of the home’s value.

The home’s value is not necessarily what you paid for the home.  The value would be based on a current appraisal ordered by the mortgage holder.

If you have made home improvements that have increased the value of your home then you may have more equity in your home than you think. 

It is up to you to request the lender terminate your PMI payments.  So, keep up with the value of your home and the balance of your mortgage due.  Usually you will be required to pay for the appraisal ordered by the lender to determine the current value of your home. 

The amount of money that you will save over the life of the loan will be a signafient amount of money.

This tax credit along with a modification for “move-up” buyers has been extended. 

For First Time Home Buyers the tax credit continues to be 10% of the sales price up to $8,000.

A First Time Home Buyer is defined as somone who has not owned a principal residence during the 3 year period prior to the purchase.

Homes must be priced at $800,000 or less.

The credit now applies to sales occurring on or after Jan. 1, 2009 and or before April 30, 2010.  However, if there is a binding sales contract signed by April 30, 2010, the home will still qualify if the purchase is completed by June 30, 2010.

Income limits for a single taxpayer to qualify  for the tax credit on homes purchased during the new qualifying period  are up to $125,000 and married couples up to $225,000.

Move up/Repeat Buyers Tax Credit

Current home owners must have lived in their previous home for five consecutive years out of the last eight years.

The tax credit is 10% of the home’s purchase price up to a maximum of $6,500.

The credit applies to homes purchased after 11/6/2009 and on or before 4/30/2010.  If there is a binding sales contract signed by 5/1/2010, the home purchase will qualify if it is completed prior to 7/1/2010.

The same income limits apply as those for First Time Home Buyers.

Other Guidelines

There are guidelines that are more specific to different situations that people have, such as, new construction, mortgage revenue bond, not a US citizen, etc.

To read more about these guidelines visit: http://www.federalhousingtaxcredit.com/faq1.php

Your credit scores and history are vitally important to your ability to purchase a home as a First Time Home Buyer.

And having a good job with a good income in order to get approval for that home loan is equally important.

Even if you have bad credit there are still ways to get into a new home.

Here are some links to a few articles I have written on the subject of Credit Scores, Bad Credit Options and How to know Whats A Good Credit Score.

Hopefully they will give you some help in this area of your quest to own your dream home.

First Time Home Buyer With Bad Credit
Your Mortgage Loan and Your Rent History
The Value of Your Credit Score

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Do it now.  You will enjoy the freedom and mobility that the wireless network gives you and your family.

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Just a reminder to all you First Time Home Buyers that the $8,000 tax credit available as First Time Home Buyer incentives will expire 11/30/2009.

First Time Home Loans

This is a wonderful opportunity for those getting First Time Home Loans.  You can pretty much look at this as a gift of money and one that you don’t want to miss out on.

Real Deadline

You must have closed on your First Time Home Loan before 12/1/2009, which means closed no later than 11/30/09.  But, most lender are saying that in order to be sure your loan gets closed on time you need to close by 11/20/09; before the Thanksgiving Holiday.  There will be delays because lenders will be closed for the Thanksgiving holiday and employees will take additional vacation at this time and it will be harder to process a lot of loans at the last minute.

Buying First Home

So, if you are a First Time Home Buyer (which means you have not owned a home within the last 3 years) then get going with buying first home quickly, otherwise you may not get your loan closed in time.