Home Buying

You will probably hear the three letters “MLS” a lot as you go about your home search. Created and managed by real estate professionals, the MLS is a proprietary database that serves as a gathering point for all property listings in a certain geographic region. Each home ‘listing’ includes extensive information – not always available to the general public – on a website like details about the home, the property and its surroundings.

The next tier consists of those with a credit score ranging from 700 to 719. If your scores were in this range on that day then the lenders would quote you a slightly higher interest rate which is 5.88 percent. This of course would boost the payment but not by much. You would pay $1,184 each month which is just $16 more than a borrower with the very best score. You still would be offered a broad assortment of loan types.

Make sure that you have everything figured out before starting your home search – both on the financing side and in terms of your own wants and needs. Below is a checklist you can use as a guide for your home search.

During your venture you will probably hear this term used a lot. It stands for principal, interest, taxes and insurance. Every loan includes principal and interest payments and those labeled PITI also include taxes and insurance. Property taxes and homeowners insurance payments can be paid in an annual lump sum. PITI means that these payments are instead spread out over the year and included in each mortgage payment.

When a property owner agrees to payment of a portion of a home’s purchase price over time, with the debt to the seller registered on the title as a mortgage, it’s known as seller financing, a vendor take-back mortgage or a purchase-money mortgage. This is a home-financing strategy in which you the buyer borrow from the seller instead of or in addition to a bank or traditional lender.

It gets worse with a score of 620 or lower. You are stuck in the subprime mortgage market. That means your scores are not high enough to qualify for a mortgage that can be purchased by Fannie Mae or Freddie Mac, the government-sponsored corporations that buy mortgages and resell them on Wall Street.

The FTC or Federal Trade Commission requires each of the credit Bureaus Experian, Equifax and TransUnion to give consumers one free credit report per year for a total of three free reports each year. But you have to ask for them. You can get your free reports by going online to www.annualcreditreport.com. Don’t go directly to the credit report companies, they’re geared toward selling you reports.

As a new home buyer you will want to integrate these famous saying in the real estate profession: “location, location, location.” Integrate these into your search process because location will play an integral role in your selection. Going beyond the home itself, factors like area schools, neighborhoods, quality of life, surrounding developments and businesses as well as roadways will also play an important part in your ultimate decision.

Each online lender has different application requirements. For example, if you visit LendingTree.com which is one of the internet’s better known lenders, they have revealed a checklist of items to bring with you when you are ready to sign up.

Hybrid loans won’t save you quite as much money as pure ARM (Adjustable-Rate Mortgage) but they are cheaper than a 30-year fixed rate mortgage and they limit your risk. They are especially popular among buyers who don’t plan to be in their new home for more than ten years. Hybrids give you a fixed interest rate for the first three, five, seven or ten years of the mortgage.