Am I ready to purchase a new home?

Part 1 of "Am I ready to purchase a new home?"

This blog is going to be the first in a series of blog's on preparing yourself to purchase a home.

One of the first you have to ask yourself when you're contemplating buying a new home is;

• What type of home buyer am I?"

Chances are that you are one of the following types;

• 1^st time homebuyer
• move up buyer
• investor
• retirement home buyer

All kinds of buyers should ask themselves the following questions;

• How much money do I have available to put down as a deposit on an accepted sales contract?
  • I recommend at least a $1,000 escrow deposit upon acceptance of the offer.
• How much money do I have available to put down as a down payment?
  • 100% financing has for the most part become a vision of the past.
  • The absolute minimum down payment these days is 2.25% for 97.75% financing through FHA as a "Full Documentation Buyer" on a primary residence with a minimum 3% contribution toward the total cost.
  • My Community Mortgage through Fannie Mae (FNMA) does offer up to
    100% LTV for 1 unit properties as a "Full Documentation Buyer."
• Am I able to obtain financing for the cost of the home?
  • It is absolutely crucial for you to contact a lender, mortgage broker, bank or credit union and fill out an application (aka a 1003) either in person or online.
  • Your Realtor is going to want to you to be pre-qualified or pre-approved for lending prior to taking you out to show you property and write up an offer.
• How much money do I have to cover the closing costs associated with my mortgage?
  • Go to your lender, mortgage broker, bank or credit union 1^st and get a
    Good Faith Estimate which will give you an estimate on the total costs associated with making the purchase of a new home.
• Are you going to ask the seller to assist you in paying your closing costs?
  • Seller closing cost assistance of 3% to 6% is the norm depending on your total amount financed. Seller contributions up to 9% are available if the buyer is putting 25% to 30% down on the property.

"Copyright © 2007 by Scott Slocum. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed without the written consent of the author."