Home buying in a nut shell

While shopping for a home is rattled with decisions and can seem overwhelming there but only a few simple questions that really need to be asked among them are.

Do I qualify?

Is home ownership affordable?

Where can I find the right home for me?

These are all questions that we should ask ourselves while pondering the purchase of our home and advancing toward the American dream.

Qualifying is an easy process, for this you will need a professional regardless of how you believe your credit, circumstances or situation. The best way to choose the lender that is right for you is to "interview" them, by this I mean have conversations. Express your goals and whatever other information you find pertinent. Before you do this I would recommend getting a copy of your credit report from any one or all of the credit agencies or online if you have the ability to order one. (You are entitled to at least one free report per year by going to the agencies though you may not get your credit score) I recommend www.freecreditreport.com . The reason you need to get your report is so that you know what your credit score is prior to your interviewing a lender, this is because they are going to want to "pull" your credit and if you can provide your credit score and payments along with you "liabilities" they will have enough information to give you an of what you qualify for though this will not be accurate until they in fact order their own credit report for you. The company I work for will provide you a merged report reflecting each score and all your liabilities along with a list and contact information for all of your reporting creditors once we begin the pre approval process for you at no cost to you.

Some lenders, banks and brokers will charge you an application fee DO NOT PAY THIS; it is in no way a guarantee of pre approval and in my opinion is a sales tactic used to get you to spend unnecessary monies to get you commuted to doing business with them. You can and will find a firm like mine that will not charge you any application fee. The fees that are incurred by the lender for pre approval should be absorbed by their business as the cost of doing business.

Affordability and qualifying go hand in hand as the lender will use the liabilities from your credit report or what you have provided them to calculate your DTI or debt to income ratio. This number should not exceed 50% which should reflect the amount of your income in comparison to your reporting credit obligations and housing expense. Once the lender has qualified you, you need to consider what payment range you would like to have after all this is what will make your new home affordable to you. If you can afford a payment of $1500.00 but your DTI is 50% you may decide that you really don't have much money left at the end of the month as these numbers doesn't consider anything that does not show up on your credit report.

Only you know what the right home is and you should interview realtors in a similar fashion, I recommend getting referrals from friends or family when considering lenders and realtors but you may find that searching the internet will provide you with all the information you need. For example you could visit www.realtor.com, www.zillow.com, or any number of other web sites that realtors and agencies use to list or advertise homes. One of the most effective ways to fine an affordable home is to search the lenders REO list which are properties the lender actually own usually by means of foreclosure.