Mortgage Rate News

Yesterday, I started a post on 10 first-time homebuyer mistakes, going through items 1-5. Today we’ll be addressing 5 more mistakes that first-time homebuyers make:

1. Lack of vision. Sometimes we think that we have to do everything to make the house “right” immediately after we move in. We bought a new construction home with no yard. It cost less than a home with landscaping. We knew we would have to put in a yard, but we can’t do it all at once. Instead, we’ve put together a plan. We know how we want it to look, and it will take another year to get it there, but we can afford it. The same goes for that ugly carpet or paint. The good news in that regard, though, is that it’s a buyer’s market and you can get the seller to take care of some of that.
2. Being too choosy. Another problem is being too picky. If it’s your first home, chances are that you can’t afford your dream house. Besides, there will always be something that could be a little bit better. It is important to realize that first-time homebuyers (and others, too) have to compromise on some things. The harder you are to please, the longer you will be renting.
3. Compromising on important considerations. While compromise is necessary when buying a home, you do not need to give away everything. Think about your life course, and what’s really important to you. If you are planning to have kids, you know you’ll need something with another bedroom. If you have a home business, you need that office space. Prioritize your wants, and compromise on the least important things.
4. Falling for staging. One of the things seller’s do to make their homes look good is something called staging. This is when they bring in cosmetic accouterments to make the home seem like it is better than it really is. Minor upgrades, such as new trim or new carpet in a couple of rooms, are another similar trick. These types of things cost about $2,000, but you can pay between $20,000 and $40,000 (or more) on the price of a home if you are not careful.
5. Failure to get a home inspection. It is vital that you have a home inspection before you buy a home. Make sure that contract you sign is contingent upon the home inspection showing that all is in order.

Can you think of any other first-time homebuyer mistakes?

Tags: first-time homebuyers, buy a home, home mortgage loan, homebuyer mistakes,
mortgage loan blog, home inspection

There are plenty of first-time homebuyer mistakes. Indeed, when it comes to buying a home and getting your home mortgage loan, it seems as though the pitfalls keep presenting themselves. Today and tomorrow, we are going to look at 10 first-time homebuyer mistakes.

Without further ado, here are 5 first-time homebuyer mistakes:

1. Not knowing what you can afford. Before you start house shopping, you need to know what you can afford. This is not the same as what mortgage lenders will let you borrow. It is about figuring what you can afford each month, and making a budget to see where your home mortgage loan payment will fit.
2. Failing to consider extra costs of owning a home. There is more to buying a home than just the home mortgage loan payment. There are closing costs, mortgage insurance, homeowner’s insurance (fire and flood sold separately), maintenance, taxes and interest charges. When you figure how much you can afford for your mortgage payment, take at 1/2 or 2/3 of that monthly figure and add it on again. That will give you a more realistic view of how much the house is going to cost overall.
3. Failing to get pre-qualification on your home mortgage. These days, what you think you can afford in terms of a home mortgage loan payment  may not be what the bank will give you. Make sure you shop around for rates and terms, and check with mortgage lenders to see what they will allow you to borrow. And remember, pre-approval does not guarantee that the loan will go through.
4. Not hiring an agent. One of the best things you can do as a first-time homebuyer is get a buyer’s agent. In most cases, the seller pays the commission for your agent as well as the seller’s agent. This means that you get these services for free when you are buying. And buyer’s agents in many states are required to act in your best interest. Plus, it can be helpful to have someone navigate you through all the paperwork.
5. Failure to consider the future. You need to do more than just pick a house. You also need to consider the future. Is it resellable? What are the plans for the neighborhood? What kinds of developments is the city planning nearby? These considerations should be looked as well as others.

Tomorrow we will address 5 more mistakes first-time homebuyers make.

Tags: first-time homebuyers, mortgage lenders, home mortgage loan, house shopping,
pre-qualification, mortgage loan blog, mortgage loan payment

With tighter lending standards across the board, it is no surprise that some mortgage lenders are requiring down payments. While many personal finance experts never stopped encouraging the 20% down payment rule, most people have gotten used to creative financing methods (such as piggyback loans) to effectively get a zero down mortgage. Now, though, some mortgage lenders are requiring as much as a 10% down payment. (You can still get FHA loans with a 3% down payment.)

So, if you need a down payment — no matter the amount — the key is getting the money. Luckily, there are some options for you in terms of helping you get a down payment together.

Ideas for getting money for a down payment

If you are looking for ideas for getting money for a down payment on your home mortgage loan, here are a few practical ideas that you can try:

• Savings plan. Figure out how much money you need to save for your desired down payment, and then decide how much time you need to meet that goal. Figure out how much money you need to set aside each month to reach your goal. Then re-do your monthly budget to make it happen.
• Sell some of your stuff. If you have a boat or a car or just a bunch of stuff you do not use anymore, sell it. Use eBay or have a garage sale. This can help you raise some quick cash to go toward your down payment.
• See if you can liquidate some of your investments. Now may not be the best time to sell stocks and mutual funds. But if you are looking for quick cash, and if your investments are worth enough, you can sell them.
• Borrow against your 401k. I wouldn’t do a withdrawal, since the taxes and penalties add up to destroy the value of what you withdraw. But you can borrow from your 401k and pay yourself back with interest. The bummer is that you miss out on the growth to your retirement fund from the capital that would have been sitting there.
• Ask for a gift. If you receive a true gift from relatives or friends, you can use it toward a down payment (it can’t be a loan).

Try one of these, or even combine some of them, to raise money for a down payment. You’ll save money in interest charges in the long run, and it may be the difference in whether or not you get the home mortgage loan.

Tags: down payment, 20% down payment, home mortgage loan, mortgage loan blog,
mortgage lenders, FHA loans, piggyback loans