Presently, we are experiencing a buyers market. This is a great time to be a first time home buyer because you can get more house in a better location for less money.

In addition to that interest rates on mortgages are low. This is still likely the biggest investment of your life and you don’t want to make a mistake. It can take between 30 to 90 days for the entire purchase process, although timelines vary according to individual buyer and seller circumstances.

Get a Pre-Approved Mortgage First

Most realtors will not show you homes unless you pre-qualify, so they know that you are serious about buying. Gather past 1040s, bank statements, credit account numbers and determine how much you have for a down payment.

Your realtor can give you a ballpark figure for the type of mortgage you will qualify and can steer you to a mortgage broker.

Once you get a pre-approval status from your lender of choice, they give you a Loan Status Report (LSR). You can then determine what price range of homes to consider.

If your lender pre-qualifies you for monthly payments you are not comfortable with, buy under that amount. You are the one that has to make that payment each month.

Start Looking at Homes Available for Purchase

Many people begin their search on the internet. You can save a lot of time by doing some research. Some people like to drive through their preferred neighborhood to see what is available.

Be careful of  ’For Sale by Owner’ properties, many of these owners have unrealistic expectations of the value of their property.

Once you have narrowed down your search, it is good to contact a realtor who can help you evaluate your choices and make an offer.

They will know what comparable properties in the area have actually sold for, not just the list price.

Make an Offer to Purchase

You submit a contract to the seller stating the amount you are offering along with the LSR so that they know you are serious. The seller may counter offer.

Once both the buyer and seller accept the offer both sides are obligated to follow through. It is always contingent on the buyer getting their loan. Your realtor will monitor the process until closing.

Money Down, Home Inspection and Appraisal

You must put down earnest money and then begin the application for the loan. There will be a home inspection which can be paid for by either the buyer or seller depending upon the terms agreed upon.

It is still possible to back out if the home inspection finds a problem that you and the seller can resolve. The lender requires an appraisal to make sure that the house has enough value to cover their loan should you default.

Once the lender gives final loan approval, you are ready for closing.

The Closing

You will get to have a final walk through to make sure everything is the same. Then a title company prepares all the documents for the signing of both parties. The title company oversees all the document signing and delivers the title to you, the new owner.

Move-in can be immediate or up 30 days depending on the agreed dates between buyer and seller.

Are Home Buyers Starting To Kick The Tires?

The $787 billion dollar economic stimulus plan becomes law today and includes an $8000 tax credit for first-time home buyers. The plan also includes tax credits for current homeowners that choose to make their homes more energy efficient.

Is It Smart to Buy a Home in This Recession?

Tips on saving and investing, dealing with debt, managing credit, and excelling in your career and your life.

I have about ,000 in credit card debt (reduced from ,000 just a year ago). I’m buying a house for the first time, is there some way to get ,000 back from my lender to pay off that debt so I only have the mortgage payment every month? This would knock out the out of control interest rates on the credit cards and save us money in the long term. I’m getting a 15yr note.

When buying a home, especially if it’s your first, you need to understand all the costs that go into making this extremely important purchase. What are the costs that you have to pay at closing?

There are one-time costs that you will have to pay at the closing time and others that are integrated into your monthly mortgage payment. Often you have the option of choosing either of these, but the advantages or disadvantages to this depend greatly on current interest rates.

Locking in Mortgage Interest Rates

In today’s market there are many variables and the rates are always changing. You may speak to a lender and think you are getting one rate but when you come back a week later, they may give you a different quote.

One way to be sure that you get the quoted rate at closing is by formally locking in the rate. This will guarantee that you receive the rate you were quoted when you go to sign the mortgage papers. If requested, lenders will lock-in for 15, 30 or more.

However, lenders charge fees for lock-ins longer than 30 days. The common fee is a quarter point for each additional 30 days although fees vary. If you believe that the interest rates are likely to go down, you may not want to do this as you may be able to get a better rate at closing.

What Lenders Mean when They Talk About Points

It is a fee that you pay at closing that helps you to lower the interest rate over the life of the loan. One point is equal to one percentage point of the total amount of the loan. In order to calculate how much lower your monthly payment will be you need to find out how many points it will take in order to lower your interest rate.

Then calculate what the difference in your monthly payment will be. Doing this makes sense if you are planning on living in your home for more than five years. If you think you live there a shorter period of time, the up-front cost will be more than what you will save.

Consider the Fees Involved when Purchasing a New Home

There are many fees related to purchasing a home. The mortgage lender requires these fees. Different lenders have different requirements.

One they all require for closing is a home appraisal; they want to make sure that your house is worth at least the amount they are loaning you.

This is important to you as well; as you want to be sure that your new home is worth what you are paying.

Other services with fees are home inspections, land surveys and title search (making sure there are no other liens on the property).

The competition in the lending interest is high, so some lenders offer reduced or no closing fees in order to get your business. Their loan may have a higher interest rate. If you need to lower you upfront costs this may be to your benefit.

If monthly costs are your concern, it might be to your advantage to pay some of those fees for a lower monthly payment. You need to shop around and ask questions to find the combination that suits your needs.

Finally, it is a good idea to meet with your tax consultant before you make this purchase.

Eight Tips to Guide Your New Home Search

Home buyer closing costs can be paid by the seller on most loan programs. The seller can pay 3% or 6% of the home buyers closing costs depending on the program.

Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and closing costs. Then, talk to a lender and get prequalified for a mortgage.

Advice To Home Buyers about Closing Costs

Advice To Home Buyers When It Comes To Closing Costs. Closing on your new home is an exciting time. Regardless of how you negotiated your purchase contract and the structure of your loan with your mortgage professional, it is important to understand the fees associated with your new loan.