Frequent First Time Homebuyer Questions and Answers

If you’re thinking of purchasing your first home, you’re sure to have questions about how to get started and what the process entails.

Here are answers to a few common first-time homebuyer questions to help you make some informed decisions.

1. How do I know if it’s the right time for me to buy?

You may hear conflicting ideas about whether or not it’s the right time to purchase a home.

The answer is ultimately up to you, but here are some things you should take into consideration when deciding if buying now is the right move for you:

Do you have a stable job and/or source of income?

Are you able to make monthly mortgage payments?

What is your credit situation?

Are you prepared to cover the additional costs that come with homeownership, such as regular home maintenance or unexpected repairs?

2. How do I get started?

The best place to get home buying help is from a reputable licensed realtor. Realtors do more than just show you properties. They can help you determine how much home you can afford, negotiate the best price, and help you navigate the tricky process that comes along with purchasing a home. You can get recommendations for a realtor from family, friends, neighbors, coworkers or a mortgage professional.

3. What’s the difference between all of these mortgage loans?

You should ask your mortgage professional to explain in more detail various loan programs, but here are two of the most common:

Fixed-rate mortgages. A fixed-rate mortgage keeps the same interest rate over the lifetime of the loan, typically 15 or 30 years. Your monthly payment will stay the same except for adjustments on taxes or insurance.

Adjustable-rate mortgages. Adjustable-rate mortgages (ARMs) have interest rates or monthly payments that can fluctuate over time. While ARMs start out with lower monthly payments, they can be riskier in the long run because of their potential changes.

This is a basic overview of just two mortgage loan options, so make sure spend some time talking with your mortgage professional about options that may work best for your situation.

4. How much should I offer for a house I want?

When you find a house you love, it can be confusing – maybe even a little intimidating– figuring out how much to offer. Come in too low and you may lose the house. But you don’t want to pay more than you have to either. Your realtor is the best resource to help you put together a strong and fair offer. He or she will provide information about the local market, the home’s condition, and comparable home sales. Be open to negotiations. You may have to go back and forth with the seller to reach the best price for both of you.

Being a first-time homebuyer is exciting, but it’s easy to get overwhelmed with the details. Educate yourself and seek out a professional to help you navigate your way through the buying process. Checkout  www.firsthomefirstloan.com  for great tips and advice.

Reasons to Purchase Your Own Home

Many people have mixed feelings about purchasing a home because they worry about getting tied down or taking on too much debt and responsibility. Here are some compelling reasons why anyone who can afford it should purchase a home.

House prices usually rise over time, so a house is one of the best investments you can make. Home prices in the U.S. have risen 3 - 6 percent a year for the past 20 years. If you purchase a home now, it would probably be a safe investment that is likely to grow.

You will pay fewer taxes. You can deduct interest you pay on your mortgage from your taxable income. The value of this tax break depends on factors such as your tax bracket, the size of your mortgage, the rate of interest you pay on it and how long you have had the mortgage. Usually the newer the mortgage, the greater the amount of interest you pay each month and the bigger the tax break. This means that recent buyers with new mortgages usually get the biggest tax benefits.

You will be buying a piece of real property rather than putting money in the landlord's hands. The cost of rent is often higher than the price of a monthly mortgage payment.

Interest rates are still low. This makes it fairly inexpensive to take out a mortgage. The lower the interest rate, the less you pay for the house and the quicker you pay the mortgage off.

You will be able to use the equity in your home to get low cost loans for other purposes. You can use the equity in your home either in the form of a home equity loan or home equity line of credit. Home equity loans and lines of credit generally carry a lower interest rate than other types of loans because they are secured. The interest on them is generally tax deductible as well.

You will have the stability and security of owning your own home. No more worry about landlords, increasing rents or your mother. You can live in your house as long as you like and you will be in charge.

You will be able to redesign and renovate any way and time you want. You can tear down walls, install a bathroom, update a kitchen or make any improvements you want. You get to decide everything. You will also be able to recoup part of the cost of home improvements.

You can have a garden space, barbeque and relax in your very own backyard. This is a big plus in home ownership. A piece of land to call your own.

You will be able to put down roots in community. You can get to know your neighbors or participate in community activities.

You will have a greater voice in community affairs. Local homeowners usually have a lot more clout when it comes to development proposals, school issues and changes in traffic control

Shopping For A Mortgage

Finding a mortgage that's right for you should be easy. There are hundreds of options to choose from. Fixed Rate, Adjustable Rate, Hybrids, Interest Only, Monthly Option ARMs, and Pay Select Mortgages, to name a few. Mortgages are available at rates ranging from an introductory rate of 1.00% to well over 10.00%. You can finance up to 100% of your home's value and, in some cases, your closing costs as well.

Because of the many options available, you will want to seek advice from an experienced mortgage professional who will look out for you. The first step in determining which program is right for you is to ask yourself the important questions below. These questions can also help you confirm that you've chosen the right mortgage professional, because he or she should be asking you the same questions before trying to put any mortgage in place:

· How long do you anticipate being in your home?

· Do you expect any changes over the next few years, such as increasing your family size or having children head to college or even move away?

· Do you expect any changes in income due to relocations, retirement, promotions, inheritance, or pensions?

· Are you expecting a change in your investments?

· When it comes to investment strategies, are you conservative, aggressive, or somewhere in between?

The reason these questions are so important is that different loan programs will offer specific benefits that will appeal to borrowers at different stages of life. What one homeowner might find appealing might cause another to reach for the Tums.

In the end, be sure you are given a complete picture of exactly how much your mortgage will cost you over the period of time you anticipate having the loan in place. This is the single most important factor you should consider when shopping for a mortgage. Not only does this data illustrate your overall financial goals, it allows for changes should things change a little sooner than expected. A good timeframe for this projection is anywhere from three, five, or even up to seven years.

When shopping for a mortgage, you should always evaluate your choices carefully and consider how they will fit in with your long-term financial plan.

Cleaning Up Your Credit

A credit report is your of a personal financial report card! Your credit report lists each and every credit card, car loan, mortgage or other credit accounts you've ever opened in your entire life; the length of time each of your accounts have been open; what your past and current balances are; if you pay your bills on time; any bankruptcies, liens, or foreclosures... plus any and all late payments reported by your creditors - present or past. Negative reports are supposed to be dropped from your report after 7 years, but that is often not the case.

"Credit Scoring" is a system creditors use to help determine whether to give you credit, and how much to charge you for it. When you apply for a mortgage, lenders will request and receive credit reports and credit scores from all three bureaus (Equifax, Experian and Trans-Union). Credit scores range from 300 to 850, but the majority of scores fall between the 600s and 700s. A credit score above 700 will get you a very good mortgage rate. A score above 720 will get you an excellent rate. A score below 700 will make it difficult for you, and credit repair should be considered.

You can have negative misinformation corrected. You can negotiate with creditors to remove negative postings and try to lower your payments. You can raise your credit score higher so you can get the loan that you want at the low interest rate you deserve. However it will take perseverance, a positive attitude, knowledge and many hours of your time.

Here are some "simple" steps:

* Obtain copies of all your credit reports, from each of the big three credit reporting bureaus, Equifax, Experian and Trans-Union.

* Make sure you get your credit score, so that you can keep track of the improvement.

* Carefully review your report line by line for mistakes and outdated information. (70% of credit reports contain errors).

* Check for identity fraud, a growing problem in this country.

* Check for accounts you didn’t open, charges you haven’t made and delinquencies you didn’t cause.

* Send all your disputes with back-up documentation, via certified mail to all 3 credit agencies.

* Demand that each credit bureau send corrected copies of your report to all creditors who may have received the incorrect reports for the past six months.

* Negotiate with collection agencies to lower collection amounts and remove negative reporting.

What is Title Insurance?

Title insurance is insurance that helps protect against losses that could happen if you discover that someone else can claim ownership of your property after you’ve closed on it.

A title search is a close examination of all public records that involve the deed to a piece of real estate. All past deeds, wills, and trusts are looked at to make sure the title has passed correctly to each new owner. The judgments and prior mortgages and other liens need to be verified as being paid in full.

The search should uncover potential problems like right of ways, view easements, power line easements, claims by prior undisclosed heirs and any possible pending legal actions.

You should always get title insurance because no one is perfect. Even an expert title examiner can miss a defect that might come up later and potentially cause a problem.

The policy will cover corrections for problems that did not show up during the title search or were missed and it will cover errors in public records.

If there are problems found after closing the policy will pay your legal fees if you must go to court to defend your deed. If you lose the property the insurance should pay for your loss up to the amount of the policy.

The policy does not cover defects that occur after you purchase the property becomes yours. It also excludes problems with easements, mineral and air rights, and liens.

If you're paying cash for the property then you don't have to buy title insurance.

The policy is usually issued for the amount of the mortgage. It pays the lender if a problem surfaces. An owner's policy covers the property's full sales price and insures the owner against loss.

The premiums are usually paid in full with a one time fee which is generally part of the closing costs.
Title insurance is relatively inexpensive and can be one of the best purchases you'll make. If problems occur you will still have to deal with them, but you can sleep better knowing you have some protection if a long lost heir of the former owner shows up on your doorstep.

Trends in Kitchen Renovations

Updating your kitchen can boost your homes resale value. It is a major undertaking, but you can tailor your kitchen to your individual needs. In today's market, kitchen renovations are among the most popular. In the past, kitchens were set off by themselves, but now that open floor plans have become so popular kitchens have become a place for socializing. No matter if you're doing a major floor to ceiling or a small facelift there are key elements to redesigning a kitchen. Here are some things to consider.

Cabinetry and Storage -

Cabinets set the tone for your kitchen, they also provide storage. Have a designer assist with the configuration that best suits your needs and space. Start with preferences. Do you like simple clean lines or an ornate and carved look? How about the chic Americana or the grand European kitchen? The Professional kitchen look is a growing trend with stainless steel counters and backsplashes and open shelving.

Lighting - 

This is the fastest way to improve the look and function of your kitchen. A well lit kitchen includes 3 types of lighting: ambient, task and accent lighting. Ambient casts a general illumination around the room. Task illuminates chore areas such as the stove or counters. Accent creates an attractive focal point. Install pendant lights over an island or kitchen table area.

Countertops - 

Granite is today's prestige countertop material. It's strong, attractive and comes in a lot of colors from warm to yellow through to colorfully flecked or veined black. Because it's natural no two slabs are alike. Marble is also a popular stone. It is a little less hardy than granite. Silestone and Corian give the real stone with uniform color options. Keep in mind it's not cheap, engineered stone usually costs more than the real thing. Slate, soapstone, butcher block and stainless steel counters are trendier and are moderate in price. Laminate is versatile and is low cost.

Appliances - 

A new stove, refrigerator and dishwasher will quickly update your kitchen. Today's trend is toward the professional style, high end stainless steel appliances inspired by the popularity of television cooking shows. If you have the budget then try built in wall ovens, a countertop gas grill, side by side refrigerator and whisper quiet dishwasher. If not then a combination oven and stove, standard refrigerator and typical dishwasher will get your energy savings up. Today's appliances are much more energy efficient. Stainless steel finishes are hot, but white remains the most popular finish. It costs less and can be just as versatile as stainless. Black appliances are also popular.

Flooring - 

If you’re tired of vinyl, then consider eco friendly bamboo, hardwood, or laminate. Deep mahogany finishes are coming back. They look elegant with white cabinetry. For high traffic areas, floor tiles in oversize ceramic, slate and limestone are popular. Vinyl flooring is a lower priced alternative that comes in a wide range of style and colors. Sheet vinyl is preferred over peel and stick tiles as the later become raised over time. Traditional linoleum is making a comeback because it has retro charm and is environmentally friendly.