Saturday, August 4, 2007

The Path to Homeownership

When asked what their top ten greatest achievements are, many people say owning their own home is number one. Homeownership represents the American dream to many. It signifies a leave of success, a level of financial security, and independence.

For those starting out, however, the path to homeownership can seem like a long journey. The Sale price of their desired home combined with interest rates, taxes, and homeowner’s insurance can make it seem like a dream that may never be achieved. The key to making home ownership a reality is to deal with the numbers at hand.

Start with analyzing your finances. This will help you determine how much home you can afford or how much you need to save for the home. Examine your income and all your monthly expenses. Check out your credit score and make initial inquiries into obtaining a mortgage. However: be careful too many repeated requests for your credit score and duplicate loan requests can negatively impact your appeal to creditors over time, so try not to have too many inquiries.

Property Search.                                                                                                                                         
Next, find out if there are or any state or federal government aid programs that could help you achieve your goal. Many states have first-time home-buyer programs that can help you understand the home buying process and develop a game plan for managing your finances.
Finally, put a plan into action. Start improving your credit by consolidating some of your debts and making consistent payments credit cards and other debts. Control your spending habits so that you will have more money saved for a down payment and expenses such as closing costs, taxes, and moving. Do your research on what mortgage programs are available at the same time. Educate yourself about mortgage rates and all the different terms. Always remember, that shopping for a loan is a lot like shopping for a new car. The more you know about the products and the different competitors, the better able you are to negotiate a favorable deal for yourself.


Guide to home buying

Buying a home?
Step 1: Defining What You WantStart by creating a prioritized list of features you want in your next home and the reasons why. Use it as your search guide, but remember that depending on your funding, you will probably need to make some compromises. In addition, talk to us about where you want to live. Location is a huge part of any move. Your real estate agents are trained to help our clients narrow down their choices by sharing market trends and local information like neighborhood statistics and community links.
Step 2: Figuring Out What You Can AffordNow that you know what you want, it's time to see what you can afford. You can start by crunching the numbers yourself using our selection of calculators. When you're ready to move to the next step, you can get pre-approved for a mortgage. This process can often be performed in under an hour and it accomplishes two important goals. First, it will tell you how much house you can afford and what your monthly payments would be. Second, it tells the seller that you can afford to buy their home.
By definition, a pre-approved buyer has an approved mortgage subject to an appraisal of the property. Many times a buyer can use this pre-approved status as leverage during the negotiation process.
Step 3: Shopping For Homes
Once you know what community you'd like to live in and have an idea of how much house you can afford, its time to start checking out actual properties. Beginning this search by contacting a real estate agent who can help save you time by target homes that meet your criteria. You can also visit real estate web sites to see a list of available properties listed in the areas you desired.
Next, begin visiting homes in person. Ask your Century21 real estate professional to arrange visits and attend open houses that are in your target area and price range. When you are comparing homes, make sure to look at all aspects of the property. Is the property tax approximately the same? Are both the houses renovated? Do they both have the same amount of bedrooms and bathrooms? Are both houses located on the same or similar streets? Does either house have any encumbrances? Remember to keep an open mind when you are looking at homes. Use a virtual home planner to help you imagine what the house could become with you as the owner.
Step 4: Making An Offer
Once you find the home you want, you need to make an offer for the house. Typically this is a very difficult and trying time since both parties have totally different goals. In most cases it is better to have a third party, such as a real estate professional, negotiate the offer. If you have any personal interaction with the homeowner, don't give out any information about your move, your current housing status, financial status or your feelings about their property - positive or negative. This could hurt you in future negotiations. This might also be a good time to consider purchasing a home protection plan. These insurance policies can be purchased by the buyer or seller and help protect against unexpected costs or home repairs during the listing period or in the initial years after a home has been purchased.
Step 5: Inspection & Insurance
After your offer is accepted you will need to set up, coordinate and interpret various inspections, including insect, radon, building quality, oil tank, title, etc. You will also need to arrange for homeowners insurance and finalize the mortgage. This is a major step in the buying process and there are many potential problems that can be discovered during this period. These include a leaky roof, radon gas, termite damage, a foundation problem, and wall cracks, to name a few. These problems happen all the time. The difference between closing on your dream home and starting the process all over again is what occurs during the negotiations between you and the seller. Your Century21 Real Estate Professional can help make these discussions go more smoothly. In most states you will also have the option of a "walk through" before the closing. This is your last chance to make sure that all of the items that you have agreed upon were completed to your satisfaction.
Step 6: The Final Closing
Before you arrive at the closing, make sure all the necessary paper work and deposits have been completed. If the mortgage, title work, homeowners insurance and other items necessary under local and state laws are not completed and brought to the closing table, the closing may not happen on time. And, depending on what the contract says, this could result in further action including financial penalties and even the loss of your rights to the home. Once you close, its official - you own the house! But there might be a few things you want to do before you lay out the welcome mat. These include arranging for an alarm system, turning on the electricity, subscribing to the local paper, cleaning or replacing the carpet, arranging for lawn services, etc. This could also be a good time to make some needed renovations. Be sure to turn to your real estate professional for guidance and information about many money-saving offers available to you!