Grant Money for Purchasing a Home

Reader question: How can I receive grant money for purchasing a home.

Unfortunately, given the current state of the economy, home buying grants are harder to come by these days. There are fewer grants to go around and just as many people -- if not more -- competing for them.

This doesn't mean you still can't find a home buying grant to help with your purchase. It just means you'll be doing more homework.

My advice is to start with your state. Many states in the U.S. offer home buying grants specifically for residents. On the HUD website, you can find a list of home buying programs (including grants and other buyer assistance programs) neatly organized by state. Here's the link: http://www.hud.gov/buying/localbuying.cfm

If I were you, I'd start making a list of grant programs offered in your state by using the website above and also using Google. You can do a keyword search for your state + the phrase "home buying grants" and find a lot of information that way. Make a list of all the programs you can find, and then start researching them to see what the qualification criteria are. Most home buyer programs have specific criteria -- they don't offer them to just anyone.

Here's another article on our website you may want to peruse:
Home Buying Grants 101

Hope that helps you out some. Good luck.

Home Loan Interest Rates - 5 Things Every Borrower Should Know

Continuing our blog series of house buying tips, I'd like to explain a few key concepts about interest rates as they apply to home mortgage loans.

If you plan to buy a house in the near future, then the topic of home loan interest rates will be near and dear to your heart. That's because the interest rate you get on your home loan will play a role in how much money you pay each month.

With that being said, there are some common misconceptions about home loan interest rates and general points of confusion. This is especially the case for first-time home buyers. So in this installment of the house buying tips series, I'll talk about how an interest rate gets applied to a home loan, and how it affects you as the buyer / borrower.

• The interest rate offered by a mortgage lender will vary from one borrower to the next. So when you see a low interest rate advertised with an asterisk beside it, you can look at the asterisk as a way of saying "rates will vary." This brings us to the next important topic...
• The home loan interest rate you are offered will be largely determined by your credit score. The higher your score, the lower the rate you'll receive. On the contrary, a lower credit score means you'll end up paying a much higher interest rate on the loan.
• With an adjustable mortgage loan (ARM), your interest rate will start out low for a certain period of time, typically three to five years. After that, the rate will increase -- and often significantly. You have no way of knowing how much the rate will increase. The initial low rate is sometimes referred to as a "teaser rate" for this reason.
• Home buyers who plan to stay in a house for more than a few years benefit from the long-term stability of the fixed-rate mortgage. With this type of home loan the interest rate stays the same, regardless of what the economy does.
  
• Interest is one of several components that make up your monthly payment. These components are collectively known as PITI. The 'P' stands for the principal amount you are borrowing. The first 'I' is for the interest rate you are given by the lender. The 'T' stands for taxes on the property (that are often rolled into the loan). And the second 'I' stands for insurance you are required to have on the home.
• Today, you need a higher credit score to obtain the best interest rates. This article explains why. It has a lot to do with the mortgage crisis of 2007 - 2008 and the federal restrictions placed on lenders in response to that crisis.
  

Do you feel like you know more about home loan interest rates now? If so, I've accomplished my goal with this blog post. I recommend you follow each of the hyperlinks above and read the background information they provide. When you find links in those articles, follow them as well. By spending some time on this website (and similar educational websites), you'll increase your knowledge of home loans in general and interest rates in particular. And being an educated consumer is the first step to success.

Tips on Buying a House - Revisited for 2008

Lately, I've been updating many of the articles on the main website to reflect economic changes of the last year, changes in the housing market, etc. When updating the many house buying tips spread throughout the website, I find myself repeating a couple of points over and over. They have to do with buying a house in the new economy, and they are important points for first-time home buyers to understand.

So I thought I would update the blog with these points as well. In fact, I'm going to start a series of blog posts with house buying tips for the modern economy. Without further ado, let's dive into the first topic...

House Buying Tip #1 - Maintain a Good Credit Score

Good credit has always been important when buying a home and applying for a mortgage loan. But it's more important than ever as a result of the mortgage crisis we have experienced. Lenders today will require you to have a better score than in the past, and they will only offer you the best rates on your loan if you have a score of about 750 or higher.

This comes as a result of the tougher restrictions put upon mortgage lenders by the federal government. Here's what it means to you, as a future home buyer. If you want to (A) get qualified for a loan when buying a house and (B) get a good rate on that loan, you need to have a very good credit score. Otherwise, you'll have trouble qualifying for the loan. And if you do qualify for a loan with a bad score, you'll likely end up with an incredibly high interest rate on top of it. This means a bigger mortgage payment each month.

So in this house buying tip I'll offer some ways to improve your credit score (if necessary) and to maintain it into the future.

For starters, you need to find out what your score is in the first place. You can find some tools on the Credit Information section of our website to help with that, as well as the home buying tools page. If you obtain your score and find out that it's low, you need to focus on improving it before buying a house and applying for a mortgage.

Let me say that again ... it's important to boost your credit score before seeking a loan. You'll have an easier time getting qualified, and you'll get a better rate on the loan. This is one of the most important house buying tips you can take away from this article, which is why I keep repeating myself on this subject.

Elsewhere on this website, you can find plenty of tips for boosting your credit and related topics, so I wont go into it much here. I will say, however, that one of the quickest ways to improve your credit score before buying a house is to pay down your credit card balances and pay all future bills on time. These two things in concert can help you boost your score faster than just about anything else. You should also work on reducing your overall debt as well.

Like I said, this is the first house buying tip in a series that will focus on the modern economy, tougher lending standards and the like. If you found this tip helpful and want to stay in touch, bookmark this web address or subscribe to this blog's RSS feed.

More Tips in the House Buying Series

• Understanding the home loan interest rate

How to Be a Real Estate Statistic in 2008 - The Good Kind

This past year of 2007 was a year of record-breaking real estate statistics in the United States. Unfortunately, most of those stats were bad. Just ask the hundreds of thousands of homeowners who faced foreclosure last year!

On the up side, there is a lot you can do to prevent this kind of real estate misery, and to avoid becoming a negative real estate statistic. Education goes a long way in this regard, and that's why I continue to publish articles like this.

So with that said, here are five ways to be a good real estate statistic in 2008, instead of a negative one:

1. Understand and Guard Your Credit

Good credit has always been important for home buyers who are shopping for a mortgage loan. But it will be even more important this year, and for the foreseeable future. Last year's subprime mortgage crisis has led to tougher regulation of the lending industry. As a result, most lenders (those that are regulated anyway) will be paying closer attention to the credit scores of borrowers.

So your first step is to understand the importance of credit in the real estate world. Your next step should be ordering a copy of your credit report so you'll know where you stand, compared to the average consumer in this country. You should also check your credit reports for errors and work to get them corrected if need be.

You are entitled to one free credit report per year, from all three of the credit-reporting companies. There are several websites you can use (including my own) to request all three reports at once, which is certainly the convenient way to do things.

Also, if your credit score is low -- lower than average, this is -- you should work on improving it. You can do this by paying down your debt, paying all of you bills on time, and being financially responsible in general.

2. Don't Buy Over Your Head

Many of the negative real estate statistics from 2007 were people who bought more home than they could rightfully afford. Of course, some of the lenders were to blame as well, mainly for offering ARM loans with low teaser rates during the introductory period, and glossing over the potential rise in monthly payments that would ensue.

Here's the bottom line. If you can't afford a home, you just can't afford a home. Instead of pursuing dangerously "creative" financing methods to purchase that new home, focus on improving your financial situation first. Reduce your debt. Save up some cash. Try to increase your income, if at all possible. You might even relocate to an area where the housing costs are more within your reach. Heck, that's the main reason I moved from San Diego to Austin!

Avoid buying beyond your financial means. It never ends well, and you will likely end up as a bad real estate statistic instead of a good one!

3. Choose Your Mortgage Type Carefully

In the previous point, I talked about the perils of the adjustable rate mortgage (ARM) loan, for people who don't truly understand the ARM.

Don't get me wrong ... an adjustable-rate mortgage can be a good idea, mainly if you have plans to sell or refinance the home within a few years. In that case, you could save yourself some money by paying lower interest rates in the short term.

Here's the key to success when choosing a type of mortgage loan. First of all, you have to understand the pros and cons of the different mortgage types. Secondly, you have to be realistic about your future plans. If you'll be staying in the home for many years, you might be better off with a fixed-rate mortgage that can weather the financial storms of the future without being affected by them.

Research the different types of mortgage loans, and then match your loan to your home-buying situation and future plans.

4. Don't Trust Lenders ... Or the Government

Here's a real "shocker." Mortgage lenders are in the business of lending money to people, and making a profit while doing so. Surprised by this? I told you it was a revelation! Mortgage lenders will do everything they can to get somebody to borrow from them, as long as they don't get burned in the short term.

So you really can't trust a lender to tell you what you can and cannot afford to pay each month. The only thing a lender can tell you with certainty is whether or not you're qualified for the mortgage ... not whether or not you can realistically afford it. And if they sell the loan to the secondary market after granting it to you, then they don't really have to worry about your financial woes down the road.

But what about the government? Surely they are looking out for home buyers, right? Well, not always. You see, there are these people called lobbyists, and many of them represent the lending industry. They make big contributions to certain political campaigns (like Schwarzenegger and Bush, to name only two) in order to influence regulations -- or the lack of regulations -- on the lending industry as a whole.

So don't expect the government to come riding to your rescue if you get in over your head with a mortgage loan. You must be a smart consumer, an educated consumer, and a self-reliant consumer.

5. Be Proactive in Times of Trouble

Even if you adhere to the other four guidelines on this list, but you still find yourself in trouble, you should be proactive about finding a solution. In other words, don't procrastinate.

Here's an example of what I mean.

Let's say you buy a new home and take on a mortgage loan to pay for it. Everything is fine for the first two or three years, but then you run into some unexpected hospital bills and other expenses. So you get behind on your mortgage payments. But you fully expect to be back on track in a few months.

Here's where it pays to be proactive. If you contact your mortgage lender and explain that your financial problems are only temporary, they probably have ways to help you out.

Generally speaking, mortgage lenders want to avoid foreclosure as much as the homeowner does. After all, they are in the business of loaning money, not managing and selling properties. That's why most lenders will work with homeowners to come up with a solution to temporary setbacks. Some lenders have tools at their disposal to help in such cases, such as repayment plans and lump-sum reinstatements. But you won't know about them unless you're proactive about it.

About the Author
Brandon Cornett publishes several home buying and real estate websites. His latest offers information on Tucson real estate and other popular cities across the U.S.

5 Real Estate Lessons From 2007

No matter how you measure it, 2007 was certainly an interesting year for real estate across the United States. We saw the typical highs and lows of real estate fluctuations, and then we saw what the news media has labeled a mortgage crisis.

In truth, the full effects of all this are yet to be seen. But we can certainly cast our attention backward and see things in the perfect clarity of hindsight. In the spirit of hindsight, here are five real estate lessons from 2007.

1. Subprime Mortgages Are a Bad Idea

Okay, so I'm generalizing here. Not all subprime home loans lead to heartache. But looking at the numbers from 2007, it's pretty clear that subprime mortgage lending in general is a bad idea.

While the average consumer learned this lesson over the last year or so, economists had actually been issue warnings against the subprime industry since the 1990's (when that industry was booming). In fact, they predicted exactly what we are seeing right now -- home foreclosures in record numbers.

And that brings me to the next lesson we learned about real estate in 2007...

2. You Can't Rely on the Government for Help

We just talked about the warnings from economists in the 1990's, about the future perils of subprime lending gone wild. So why didn't our government do something to curtail the "easy lending" practices of these lenders? The same reason as usual -- money. In fact, if you follow the money trails (which are public record by the way), you can see how certain subprime lenders donated a lot of money to certain governmental campaigns.

3. Use an ARM Loan With Caution

The adjustable rate mortgage (ARM) went hand-in-hand with the subprime lending practices that were so common in the 90's through the early 2000's. People credit problems were offered mortgage loans with low interest rates up front, but with the uncertainty of a future adjustment on that interest rate.

Some borrowers understood the concept of the ARM loan, and would either refinance or sell the home before their mortgage reset to a higher interest rate. But even more borrowers failed to understand this concept, and were shocked to see their mortgage rates shoot up after three years or so.

Here's where consumers and lenders share part of the blame. It's up to lenders to educate consumers on the future risks of an ARM loan (instead of closing as many loans as possible and letting borrower's sink or swim). It's also up to consumers to educate themselves about these things, so they can choose the best type of mortgage loan for their financial situation.

4. If You Can't Afford a Home, You Can't Afford a Home

It would be great if everyone in this country could afford a home. But that is simply not the case. People with financial problems, poor credit, and uncertain income should probably avoid the extra financial burden of buying a home. Instead, they should focus on shoring up their credit, getting control of their finances, saving money, etc.

If you strengthen your financial house first, your actual house will set on a more stable platform -- a platform of financial security.

5. Good Credit is More Important Than Ever

Going forward, into 2008 and beyond, home buyers will be placed under greater scrutiny by mortgage lenders. This is a direct result of the mortgage "crisis" that came to a head in 2007. Tougher regulations have been imposed on many lending institutions (especially the subprime bunch), so the "easy lending" days of the past are gone. At least for a while.

So it's more important than ever for home buyers / mortgage shoppers to have better credit scores going forward. It's also wise to pay down unnecessary debt, such as credit card balances, to achieve a more favorable debt-to-income ratio. Lenders will be looking at these things much more closely in the future, so you've got to have your financial ducks in a row.

5 Tips for Buying a Home in 2008

Wow! What a year for the real estate and mortgage industries. When people look back on 2007 from a business and financial perspective, they will likely recall the subprime mortgage "meltdown" that has yet to play out.

The whirlwind of media coverage that has surrounded the subprime crisis leaves many home buyers scratching their heads. "What does all the mean to me," many buyers want to know. "What lessons should I take away from all this?"

With an eye on current events, I offer you the following tips for home buying in 2008.

1. Boost Your Credit Score

Credit is everything when it comes to home buying. Many of the people who became foreclosure statistics in 2007 got there because of subprime ARM loans -- the only type of loan they could afford given their bad credit. So focus on maintaining or improving your credit score in 2008. The first step to this is getting a free copy of your credit report and score, to review them for accuracy and overall "health."

2. Understand the Different Mortgages

Don't rely on a mortgage lender to tell you what you need to know about the various types of mortgage loans. Mortgage lenders make money by selling mortgages, so that is their primary focus -- selling you a home loan. It's up to you to understand the pros and cons of different mortgage types, and how they will affect you in the long run.

3. Know Your Real Estate Market

At the time of this writing, many real estate markets across the U.S. are experiencing a major slow down. This might mean that buyers can get a good deal on a home, and then profit from the appreciation / equity when the market swings back up again. The key to making a wise home-buying decision comes, in part, from understanding your local real estate scene. The "Homes" section of your local newspaper is a great place to start.

4. Reduce Your Debt

If you decrease your debt while keeping your income steady, you will have a more favorable debt-to-income ratio, which is one of the things mortgage lenders consider when approving people for home loans. That's one of the many reasons to pay down debt. Start with those credit card balances, since they probably have the highest interest rate of all your debt items.

5. Increase Your Savings

It's always a good idea to increase the amount of money you put away each month, but it's an even smarter idea if you plan to buy a home in the near future. Mortgage lenders will check to see how much cash you have readily available, because they know you'll have to cover closings costs when buying a home. Start putting money away as early as possible.

All of these tips can be summed up in one simple statement -- be a smart consumer. Many of the people who suffered under the mortgage "crisis" of 2007 were not smart consumers. They overspent and made shortsighted financial moves. Hence, they became statistics in a negative way. Follow the tips above, and you can avoid joining their ranks!

First Time Buying a Home

It is my first time buying a home and I don't know where to start.

This is a common introduction we see on emails from first-time home buyers. For somebody who has been through the home buying process before, it might seem obvious where to start the process. But for someone buying a first home ... it can be downright baffling.

That's why we like to chime in from time to time with articles written especially for the first-timers out there. So if this is your first time buying a home and you need some help getting the process started, this one's for you!

First Time Home Buying - By the Numbers

Let me begin by saying the process of buying a home can be different from one person to the next. For example, some people can afford a big down payment, while others have trouble making a down payment of any kind. Some people have great credit and will easily qualify for a mortgage loan, while others have poor credit and will have to shop around a lot more.

Just like no two home buyers are identical, no two home-buying experiences are identical either.

With that being said, there is a general sequence of events that will take place during your first time buying a home ... and they go something like this:

1. Review your finances, your credit score, etc.
2. Determine a home buying budget, create a wish list, etc.
3. Get pre-qualified for a mortgage loan.
4. Find a real estate agent.
5. Start the house hunting process.
6. Find a home that meets your needs, budget, etc.
7. Make an offer.
8. Offer gets accepted (hopefully).
9. Get a home inspection.
10. Lender will have the home appraised.
11. The home passes the appraisal process (hopefully).
12. Take care of other financial details with lender, escrow agent, etc.
13. Go to the closing / settlement meeting.
14. Review and sign all documents, pay all closing costs, and get the keys!

We have outlined the home buying process in many places on this website, so there's no point in rehashing it all here. I want to focus on the preliminary steps you should take when it's your first time buying a home ... the first steps on your path to homeownership.

In my opinion, the three most important things a first-time buyer should do -- and as early as possible -- are the following: (1) review your credit reports and financial standing, (2) start saving extra cash, and (3) start reviewing the home buying and mortgage process.

The first two items (credit review and saving cash) are essential if it's your first time buying a home ... and here's why. If you find errors on your credit report, you will need to get them resolved as early on as possible. It takes time to fix such errors, so you should not delay doing so. Negative information on your credit report -- even if it's erroneous information -- will interfere with your mortgage approval.

It's also important to review your credit and finances to see where you stand. Do you have a good credit score or a weak one? Is your debt-to-income ratio favorable or not so great? Lenders are going to review these items, so you'll want to do it first.

It's also important to start saving your cash, and the more the better. If it's your first time buying a home I can almost guarantee that you'll encounter more fees and total costs than you expect. It always happens, and that's why mortgage lenders like to see that you have some extra money saved up to cover such things.

When buying your first home you will also encounter a lot of terminology and concepts that are unfamiliar to you -- especially on the mortgage side of things. So by brushing up on your home buying and mortgage terminology (especially the meaning behind the terms), you will be better prepared for your first time buying a home and taking on a mortgage.

I hope this article makes you better prepared for, and more comfortable with, your first time home buying process. If you have any additional questions, you can ask them here.

-Brandon

Buying a New Home vs. Old Home

One of the first decisions most home buyers have to make is: Should I buy a new home or an older home? Obviously, there are pros and cons on both sides of the fence.

Pros and Cons of Buying a New Home
Buying a new home usually means you will have a warranty. Also, if you have a home built, you will be able to pick certain features and floorplans that suit your needs. On top of that, there's just something about buying a brand new home that appeals to most buyers. Of course, you'll pay a premium for all of these things. New homes will almost always cost more than comparable homes that are being sold by the homeowner.

Pros and Cons of Buying Older Homes
The most obvious advantage of buying an older home is the cost factor. You will generally pay a much lower price for an older / existing home than you would pay for a new home that is comparable in size. The major downsides to buying an older home is that you face more potential risks in terms of deterioration and other age-related factors.

A Florida news website recently ran a good article that delves deeper into the dilemma of buying a new home or an older home. Here's an excerpt from that article:

Grimes noted that one downside to buying in a new neighborhood can be putting up with noise and construction activity. A lack of mature vegetation can also be a turnoff. Architectural styles tend to be more homogenous, versus older neighborhoods where there may have been multiple builders, resulting in a more eclectic ambience.

Read the full article here

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Get more home buying advice at HomeBuyingInstitute.com
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5 Home Buying Tips for First Time Buyers

Countrywide Provides 5 Home Buying Tips for First Time Buyers

Home buying can be perceived as one of the most complicated transactions a person can make. That is why Countrywide Home Loans offers five home buying secrets that most first-time buyers may not know. These helpful home buying tips may help reduce confusion about mortgage payments and the cost of buying a house.

Calabasas, CA (Vocus/PRWEB ) October 23, 2007 -- Home buying can be perceived as one of the most complicated transactions a person can make. That is why Countrywide Home Loans offers five home buying secrets that most first-time buyers may not know. These helpful home buying tips may help reduce confusion about mortgage payments and the cost of buying a house.

Countrywide Home Loans understands that home buying can be a difficult and confusing process, from deciding whether homeownership is right for you to finally making the move into your new home. As a result, many people are hesitant to ever start the process, despite their desire to own a home. So, the company also offers personalized, no obligation, home loan consultation. First time buyers can call 1-800-845-0058 or apply online.

“Consumers are becoming more educated and prepared when making major purchases,” said Dan Hanson, managing director, Countrywide Home Loans. “However, buying a home is still an area that is confusing and intimidating to most people. Prospective buyers should visit their local Countrywide branch to discuss personalized financing options. Often, the local branch’s home loan consultants are aware of specific programs and real estate professionals who can help first-time home buyers find the best solution for their needs."

Here are five home buying tips and facts that can help you decide whether to buy a house, negotiate your home purchase and determine which mortgage is best for your personal situation:

1. Mortgage payments might be the same or less than rent payments – The monthly payment on a $250,000, 30-year, fixed rate mortgage at an annual interest rate of six percent (6.273% APR) is $1,499# -- less than what some people pay for rent.

2. Buyers don’t have to put 20 percent down to buy a home – Some lower down payment loans are available for qualified buyers. For instance, three and five percent down payments are still available, and some lenders offer low down payment options to help qualified buyers purchase a home. This all adds up to less money out-of-pocket to buy a home.

3. Buyers may ask sellers to pay for closing costs – As part of the negotiating process when buying a home, the buyer may ask the seller to pay for a percentage of the non-recurring closing costs, sometimes saving thousands of dollars for the buyer.

4. Buyers can receive gifts or grants from relatives or nonprofit organizations – Certain loan programs will allow a portion of the down payment to come from a relative. Buyers can also investigate down payment assistance programs and grants available through various nonprofit organizations and employers, as well as from many federal, state, and local governments. Many of these programs are designed for qualified low-, moderate- and middle-income borrowers.

5. Buyers should always get preapproved before they begin house hunting – Buyers should get a written preapproval from a reputable mortgage lender before they start shopping for a home. Preapproved buyers will not only know in advance how much home they can afford, but their preapproved status gives them clout with sellers and real estate agents when the time comes to negotiate a sale price. Lastly, preapproval speeds up the loan process after a purchase contract is signed and avoids any last minute heartbreaks after a home is found.

For more home buying information, visit our website at Countrywide.com or call 1-800-845-0058.

# This example is based on a 30-year fixed rate, $250,000 loan in California with 2 points at 6.273% APR (and a 720 FICO score at 80% LTV for a purchase transaction).

About Countrywide Home Loans, Inc.
Countrywide Home Loans, Inc., a member of the Countrywide® family - America's #1 home loan lender – (as ranked for 2006 by Inside Mortgage Finance, Feb. 2, 2007, Copyright 2007), originates, purchases, securitizes, sells and services home loans and is the primary subsidiary of Countrywide Financial Corporation (NYSE: CFC). Countrywide Financial Corporation, through its subsidiaries, provides mortgage banking and diversified financial services in domestic and international markets. Founded in 1969 and a member of the S&P 500 and Fortune 500, Countrywide Financial Corporation is headquartered in Calabasas, California. http://www.countrywide.com

Tips on Buying a Home - A Collection of Tips

Summary: In this blog post, I've compiled some of the most helpful tips on buying a home from all over the Home Buying Institute website. It's a huge website, so I thought I'd help you by pointing out some nuggets of wisdom -- tips on buying a new home.

I remember my first home-buying experience with equal amounts of pleasure and displeasure. The please obviously came from getting out of an apartment and into a new home. The displeasure came from scouring the Internet for tips on buying a home and other information I needed.

That's the main reason I built this website. It's a compilation of the kinds of tips on buying a home that you could eventually find on your own -- but I've said you time and energy by building a comprehensive website full of tips on buying a home and related information.

My Favorite Tips for Buying a Home

Here are some of my favorite home buying tips from all around the website:

Determining Your Home Buying Budget
One of the best tips on buying a home I can give you is to determine a realistic budget for yourself, before you start talking to mortgage lenders. This article explains why.

Choosing a Real Estate Agent
If you're a first-time home buyer, you should probably have a real estate agent's help. Despite how many tips on buying a home I share with you, nothing can take the place of professional, one-on-one guidance.

Using Helpful Home Buying Websites
Personally, I think this website is one of the best places to find tips on buying a home ... but of course I'm biased. So I've made a list of seven other websites that offer home buying tips, tools and information. They are all worth bookmarking in your favorites folder.

Reviewing Your Credit
You should review both your credit report and your credit score before talking to any mortgage lenders. In this section of the website, you'll get instructions on how to go about it. This is one of the best tips for buying a home I can give you -- review your credit early on in the process, and maintain the best credit score you can.

Understanding Your Mortgage Options
Here's a helpful home-buying tip that you simply must follow. Learn about the various types of mortgage loans! By understanding the different home loan options available to you, you'll be better able to choose the right one. This article is a great place to start.

Getting a Home Inspection
A lot of home buyers ask the question, "Do I really need a home inspection?" The answer is yes, you should always have a home inspection prior to purchasing. In fact, I would consider this one of the top-five most important tips for buying a home ... especially if you're a first-time buyer.

Preparing for Settlement
The settlement (or closing) process is the final step in the overall home-buying process. It's when you sign all of the final documents, settle things financially, pay a bunch of fees, and get yourself a set of keys to a new house! But you'll need to prepare for the closing process, and this article (and other articles in the section) will help you do just that.

Home Buying Tips - Conclusion

I hope you've enjoyed this list of tips on buying a home that I put together, and I hope it makes your home-buying experience more enjoyable and successful. Be sure to spend some time traveling around the website. It offers more than 400 articles on all aspects of the home buying process, so it will be time well spent.

Home Buying Tips for First-Time Buyers

Buying your first home is a major financial move the requires careful forethought and planning. Why do you need to be so careful? Take a look at the record-breaking number of home foreclosures right now.

The point is, you really have to do your homework before buying a home so you don't end up with a financial trouble down the road. Here are three things you can do to be a financially smart home buyer:

1. Check Your Credit.
Most mortgage lenders will use your FICO scores to judge your loan eligibility. When you hear people refer to a credit score, they are usually referring to your FICO score. A higher credit score will enable you to qualify for a lower interest rate (and thus a lower mortgage payment in general).

With many lenders, a credit score of 650 is sort of a border line. At or above 650, and you are considered a safe risk for the lender and should be able to obtain a mortgage loan. On the other hand, if your credit score is below 650, you may find yourself in a bad credit home buying situation that requires you to pay a higher interest rate.

The best you can do in the long-term is to maintain good credit. We also offer articles on this site that show you how to improve your credit score if it is low. Remember, the better your score, the lower the interest rate on your mortgage.

2. Determine a Realistic Budget
As we have seen in the news lately, with all the hubbub over home foreclosures, mortgage lenders often make loans to people who probably have no business taking on such a loan. In other words, they extend mortgage loans to home buyers who are poorly qualified for the loan. They do it to assign high interest rates for profit in the short term. But if the mortgage loan later resets to a higher interest rate (like an adjustable rate mortgage), the homeowners who were barely getting by before are now really in trouble.

The point is, you need to determine your home-buying budget for yourself. Don't make the mistake -- as many home buyers do -- of thinking you should borrow the maximum amount a lender is willing to offer you. That's a backward way of thinking. You should only take on a mortgage that you are comfortable paying each month.

Start by using a free mortgage calculator to break a home's sale price down into monthly payments. Factor in a higher interest rate than what the mortgage calculator defaults to, just to play it safe. For example, if the mortgage calculator has 6% already filled in for interest rate, bump it up a point to 7%. This will give you a good idea of what the mortgage payments could be on a home in that price range. Could you pay that amount each month?

3. Start Saving Your Cash
I can almost guarantee you that you'll have out-of-pocket expenses when buying your home. These costs will likely add up to more than you anticipate. That's just the reality of home buying in this country. You will pay for a home inspection, an appraisal, and several other things that will make up your closing costs. And that doesn't even account for moving expenses, purchases for the new home, etc.

Having extra cash will help you through the home buying process, but it's always a good idea to have extra money saved as a homeowner. If something goes wrong with the house -- like a faulty water heater or a leaky roof -- you'll need some cash reserves to handle the problem. Get into the habit of putting money aside each month, after you make your mortgage payment. This is one of the most responsible things you can do as a homeowner.

Happy home buying!

Real Estate Closing - New Article Posted

For the first-time home buyer, a real estate closing / settlement process can be a mysterious and intimidating process. After all, it signifies the transfer of home ownership from the seller to the buyer, and that's a major financial transaction.

There's also number of costs associated with a real estate closing, which can make it even scarier to those unfamiliar with the process.

But a real estate closing process doesn't have to be scary. In fact, once you understand the process (and have prepared accordingly), a real estate closing isn't scary at all. That's why we have provided a variety of articles to help you understand the closing process.

Here's the latest of those articles:
Real Estate Closing Costs Explained

Happy home buying!

~Brandon

Buying a Home vs. Renting a Home

One of the first questions many home shoppers ask themselves is, "Should I buy a home or rent?"

For some, this question is easy to answer, as the lure for home ownership tips the scales in that direction. But for others, it's a tougher decision. For instance, some people might prefer to rent a home to get to know the community and experiment with their budget (before taking on a mortgage).

So what are some of the advantages of buying a home vs. renting a home? Which option is best for you? Here are some resources to help you decide:

Buying vs. Renting Calculator - This tool on the Ginnie Mae website will help you compare the advantages and considerations of owning vs. renting a home.

Buying versus Renting - More information on the same website that stacks up the pros and cons of buying vs. renting a home.

The Buy vs. Rent Decision - This article by financial guru Suze Orman does an excellent job helping you weigh the advantages and disadvantages of buying or renting a home.

Buy vs. Rent: What's Right for You - Here's a helpful tutorial that will help you ask the right questions (in the right order) about buying vs. renting a home.

Happy home buying!

~Brandon

Real Estate Blogs - Good Source for Home Buying Info

These days, a lot of real estate agents are using blogs to educate their audience about home buying in their area. [Side note: definition of blogging]

These real estate blogs are often a great source for home buying information. What makes them so helpful? Well, for one thing blogs are usually a lot more current than regular websites. Blogs are really easy to update, so the blog's author is more likely to publish information on a regular basis. And in real estate, fresh information is a must.

Blogs also create RSS feeds, which is basically a content feed that you can add to a feed reader, or to your My Yahoo or My MSN page. In other words, you can subscribe to a real estate blog anonymously, without giving up private information such as your email address.

How do you find real estate blogs? It's as easy as entering your city plus the words "real estate blog" into a search engine. For instance, if you lived in San Diego, you would enter "San Diego real estate blogs" into a search engine. Do that, and you'll find the blogs of hundreds of real estate agents!

Happy home buying!

~Brandon

Home Buying Grants 101

Home buying grants are a popular subject among home buyers. And why wouldn't they be? The very word "grant" suggests free money, and any home buyer could use free money.

But there's more to home buying grants than simply applying for the grant and getting the money. Home buying grants run the gamut from government-sponsored grants to private grants. The question is, where do you begin? How do know if you're qualified for a home buying grant? And if you are qualified, how do you apply for a home buying grant?

To help you learn more about grants for home buying, we've gathered a few resources:

Your Guide to Federal Grants

The Federal Government and Private Grant Foundations issue billions of dollars in grant money to a variety of groups each year. How would you like to obtain such a grant for home buying purposes? If you want to learn more about the many grants available and how you can use them for home buying purposes, I strongly recommend you visit this guide to federal grants. Go there now

Info on Grants for Buying a Home

Home Buying Grants from HUD
The Department of Housing and Urban Development (HUD) is a good source for information on home buying grants. Though HUD does not make grants directly to home buyers, they do "work through local governments and non-profit organizations to make financial assistance available."

Home Buying Grants in Your State
This is another great resource on the HUD website. It lists home buying grant programs (and low-income home buying programs) offered in various state. Just click your state's link to learn about home buying grants in your area.

Low-Income Home Buying Grants
This article on CNN Money does a decent job explaining the concept of low-income home buying, including home buying grants. This article will give you a solid understanding on what "home buying grant" means ... and what it doesn't mean.

Grants for Home Buying in Your State
Here's a trick you can use to find home buying grant information in your city and/or state. Using a major search engine like Google or Yahoo, enter the phrase "home buying grants" followed by the plus sign, followed by your city name (or state name). For example, if I wanted information on home buying grants in Texas, I would enter the following into Google:

home buying grants +texas

We hope this guide to home buying grants has helped you better understand what these grants can do for home buyers, and what they can't do.

Happy home buying!

~Brandon

Buying a Home With No Money Down

Buying a home with no money down is a hot topic among home buyers. The reasons are somewhat obvious. Some people simply don't have the money to put down for a new home.

This is the primary reason for buying a home with no money down. But whatever the motivation, there's a lot to learn before you're ready to buy a home with no money down. That's why we've created this mini-tutorial on the subject.

The articles below will help you learn more about buying a home with no money down.

Buying a Home With Little Down
This home buying article on CNN Money offers some insight into buying a home with little money down. An excerpt: "In general, the less you put down, the better your credit needs to be. Also, smaller down payments typically mean slightly higher interest rates, not to mention private mortgage insurance (PMI)."

Buying a Home With Little or No Cash
This Wells Fargo chart shows the kinds of programs you can use to buy a home with no money down (or with a minimal down payment). Note: these programs are specific to Wells Fargo. Other lenders may not offer these same options for no-money-down home buying.

No-Money-Down Home Buying
This article at BankRate.com explains your options for buying a home with no money down. An excerpt: "For many potential buyers, the problem is coming up with a down payment to make this all-important purchase. This should not be the case. It is possible to buy a home with nothing down, meaning no down payment."

Buying a Home with Poor Credit and No Money Down
This article throws another variable into the mix. It talks about buying a home with no money down and poor credit.

Conclusion
If you're trying to buy a home with no money down, this mini-tutorial is only a starting point for your education process. These articles will put you on the path to further research, and that's a good thing. When it comes to buying a home with no money down, you can never know too much about the programs and options available to you.

Happy home buying!

~Brandon

New Home Buying Tips

What makes buying a new home different from buying an older home? What new home buying tips should home buyers be aware of?

These are common questions asked by people buying a new home ... especially when they are first-time home buyers. So, in true Home Buying Institute fashion, I've gathered as many new home buying tips as I could find. Some are on this website, others are new home buying tips from around the Web. Taken together, they encompass 90% of what you should know about buying a new home.

New Home Buying Tips: AmericanHomeGuides.com
This page is actually a series of articles, each one built around a particular new home buying tip. Very in-depth and informative!

How to Buy a New Construction Home
This article is another in-depth look at the process of buying a new home. Full of new home buying tips and advice.

Tips on Buying a New Home
This is a "step-by-step home buying guide through the new home buying process. It's a well-designed tutorial full of new home buying tips, and divided into sections based on the parts of the new home buying process.

Questions and Answers About Buying a New Home
This article answers 100 of the most common question that new home buyers ask. With 100 hundred home buying questions listed, they're bound to have an answer to yours! An excellent list of new home buying tips.

101 Steps to a Smoother Home Buying Process
I created this article myself, and I'm quite proud of it. It lives up to its name, offering 101 new home buying tips. Most of the tips contain links to more information too, so it's full of "jump off" points for further learning!

I hope this list of new home buying tips helps you to better understand the home buying process. And I wish you the best of luck buying your new home.

~Brandon

Real Estate Search Engines - A Good Review

Real estate search engines have exploded in recent years.

A lot of this has to do with Google. The search engine company allows webmasters to customize their Google Maps and Google Earth programs, and this has spurred an increase in the number of "map-driven" real estate search engines.

But with so many real estate search engines to choose from, where do you even start? And what is a real estate search engine, anyway.

Here's a good review of today's popular real estate search engines.

Happy home buying!

~Brandon

First-Time Home Buying Tutorial

We've created a handy little tutorial for first-time home buyers. It's all about buying a first home, and it's jam-packed with information and related resources.

Some of the main sections include:

• Financial self-assessment
• Credit review process
• Finding a real estate agent
• Choosing a mortgage
• The mortgage process
• House hunting
• Home inspections
• Closing / settlement

Check it out:
First-Time Home Buying Tutorial

I hope this tutorial helps you when buying your first home!

~Brandon

10 Basic Steps to Buying a Home

When learning about the home buying process, it's wise to start with the basic steps to buying a home.

I like to call this the "skeleton of your home buying education." Once you understand the basic home buying steps, you have a skeleton of knowledge that you can build on and expand. Okay, maybe that's a little Edgar Allen Poe of me ... but you get the point.

So I've taken the liberty of creating a home buying skeleton for you. This new article is more than an article -- it's a road map of the home buying process with links to plenty of additional advice. I hope you find it helpful.

Go there now:
Home Buying Steps: 10 Basic Steps to Buying a Home

~Brandon

Buying a HUD Foreclosed Home - New Section of Website

Recently, I was conducting some online research for a home buying article, and I had trouble finding a "one stop shop" for information on HUD home purchases.

The mission of Home Buying Institute is to be a one-stop shop for home buying information of all kinds -- including tips for buying a HUD home. So, we took it upon ourselves to add a new section of the website dedicated to buying a HUD foreclosed home.

What you'll find inside:

* Tips and advice from different authors
* Links to additional resources off-site
* And much more on the way soon

Go there now

Happy home buying!

~Brandon

Buying a First Home - New Resource Posted

Buying a first home can be exciting and scary at the same time. As a first-time home buyer, you have to learn a lot about the process and the terminology. It can be overwhelming at times.

I hope to remove some of that fear and make the process much smoother for you with a new resource I've just published. It's a tutorial on buying a first home ... a "must read" for any first-time home buyer.

Buying a First Home - A Tutorial for First-Time Buyers

Happy home buying,

~Brandon

The Home Inspection - Who's Fixing What?

In a previous post, we talked about the home inspection process and what home inspectors do. So, now you've decided to have an inspection, and your inspector comes back with a list of discrepancies.

So what next? Who's fixing what?

When you review the inspector’s list with your agent, you’ll have to decide which items (if any) you want the sellers to repair. Like nearly everything else in the home-buying process, the fix-it list is negotiable. When you submit your list of requested repairs to the sellers, you face one of several outcomes:

1. The seller will agree to fix all of the items.

2. The seller will agree to fix some of the items.

3. The seller won’t agree to fix any of the items.

4. The seller will reduce the price in lieu of certain repairs.

How you proceed in light of the seller’s response is up to you and your agent. A good rule of thumb -- don’t ever turn a blind eye to a major repair issue just because you’re excited about getting in the house. If you’re an experienced investor and you’re buying the house specifically to fix it up, that’s one thing. But if you’re buying your first home, be conservative and carefully consider each item on the inspector’s list. It will benefit you in the long run.

Learn more:

Learn more about home inspections