Insurance and Credit

Buying a home can be both an exciting a stressful time. Many people consider doing it themselves in an effort to save money. Whether you are a first time home buyer, or looking for another home, there are many factors that need to be taken into consideration, especially if you are going to buy it yourself without the help of a real estate agent. Are you ready for the responsibilities of homeownership?

Purchasing a home is a major life investment. Before you sign the contract, make sure you can meet the responsibilities that come with homeownership. Make sure that you are financially ready for such a big purchase. Easy to use mortgage calculators that can be found online will allow you to determine if you can afford a home. It will also determine how much you can afford. Mortgage payments include the amount borrowed, the interest, and usually the property taxes. To check to see what you can afford, calculate your net worth, determine your monthly expenses, and your current monthly debts. Make sure you allow enough for unexpected costs such as any repairs you may have to do.

Can you afford the Up-Front Costs?

There are many up-front costs associated with buying a home. It is important to know all of the costs involved so you can determine if you can afford it. These costs include: mortgage loan insurance premium, appraisal fee, down payment, home inspection fee, land registration fees, prepaid property taxes, utility bills such as getting the oil tank filled, homeowners insurance, survey costs, water tests, title insurance fee, and legal fees.

What are your housing needs?

You should know what type of home will suit your needs. You should consider the size of the home such as number of bedrooms and bathrooms, extra features such as walk in closets, a large backyard, a garage…etc. Will the home accommodate a growing family such as more children? Or, is it a retirement home?

Where do you want to live?

You have to decide where you want to put down your roots. Do you want to live in a rural community or urban atmosphere? Location to schools, parks, your workplace, and shopping centers must also be considered. Determine the market value of comparable homes in the neighborhood before making an offer.

Do you want a newly constructed home or resale home?

There are advantages to each type of home. Newly constructed homes are more energy efficient, modern designed, wired for todays technology, require less maintenance, and often come with building warranties. Older homes, or resale homes, tend to have more charm, the taxes will be lower, and they are usually located in established areas near amenities, schools, shopping centers…etc.

What Professionals should you hire?

There are a number of professional services you will need before you make a purchase. This can include real estate agent, mortgage broker, lender (either a bank or other institution such as a trust company or Ontario credit union) attorney, home inspector, insurance broker, home appraiser, and surveyor.

Do you understand the purchase agreement?

Before you sign the contract, read through the entire contract form. If there is anything that you do not understand, consult with a lawyer or real estate broker. Make sure you have mortgage approval before signing the agreement.

Does you contract include an out?

When you sign the purchase agreement, make sure you include terms and conditions that will allow you to cancel the contract. Conditions can depend on approval of inspections and financing.

If you buy a home without a real estate agent, you may save the commission costs if you negotiate the price. Because of the many factors involved with buying a home, enlisting the services of a real estate agent can reduce a lot of stress. No matter what choice you make, it is important to take the time to know all that is involved with buying a home.

So much news coverage has been given to the housing crisis, to which not many economists attribute the Global Economic Recession to. Record numbers of foreclosures have discouraged prospective homeowners from buying their dream homes; for fear that mortgages will just become unbearable as the economy continues to decline, which will most likely lead to repossession of their houses. The answer to such fears is lower mortgage rate.

Mortgage refinancing can give you lower mortgage rates. It will help you better afford your house and prevent foreclosures. Signs are pointing towards a better year for the housing sector. Just recently, mortgage giant Freddie Mac announced that the interest rates for long-term US mortgages went down to 4.96%–almost 1% lower than last years average interest rate. This good news is enough to encourage homeowners to apply for a mortgage refinance.

However, the stigma of the crisis that started in late 2007 is still being felt, and its effects continue to serve a threat to the complete recovery of the housing industry. Lending companies laid off many of their employees, and being short-staffed, are unable to process as many loan applications as they get.

Recently passed laws created to cushion the effects of the current crisis have also resulted in tighter lending standards, causing many applications to be denied. Even borrowers with good lending scores and stable jobs are finding it difficult to have their loans approved.

The question now is: How do we get past these obstacles and make the most of lower interest mortgage rates? Here are some tips that will help you:

1. Consult with mortgage brokers ” they are the ones who know the system best. They know what it takes for a loan to be approved, and they also know what terms will work well for you given your financial standing. This may take some patience on your part, but getting information from the experts before making a decision as important as this is, could be one of the most valuable investments you can ever make.

2. Look for lower rates ” Pick up your phone and call more than a few lending companies. With more and more prospective borrowers as the situation begins to improve, these companies will try to outmaneuver one another by offering better terms. Just do a little bit of research and for sure you will get the best out there.

3. Pay your bills on time and secure all the documents you need for your loan application. This will help facilitate your application expeditiously.

4. Do not make multiple credit applications ” From the lending companies that you know about, just choose one which offers the best rates, because sending multiple applications at once will give the impression that you are in a terrible financial standing.

Mortgage applications are actually at a high because the housing market is currently low. There are some great mortgage deals available if you have a strong credit background. Banks that have received government support are particularly offering excellent rates on mortgages. It is possible to get a mortgage of up to 90 percent of the price. No longer will banks give out 100 or 126 per cent mortgages.

Determining if you are getting the best deal can be tricky when the market is changing so swiftly. A solution to this is to utilize the services of a mortgage broker. Before using a broker you should be aware of any fees involved and if they have access to the entire markets information or just sections of the market.

Also, with today’s tough market conditions, many individuals are making modifications to their mortgages. To begin trying to modify your mortgage you need to deal directly with the lender and try to work out ways in which you can still make your mortgage payments without having to default.

Most of the time you and your lender will be able to come to a satisfactory arrangement, as banks do not want you to default on your mortgage.

Some of the top qualifications to receive a mortgage include having a steady job. If you have held a job for at least two years then you will find it very easy to get a loan. You also need to have a good income. If you do not make at least twice what the monthly payment is then your mortgage application will probably be turned down. A good credit score always helps and this can be an important factor in getting a mortgage. Finally you need to be able to make a down payment somewhere between 3 to 20% of the total mortgage amount. If you meet those requirement, you’ll be able to get a mortgage.