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There are some basic financial things you can do to get prepared for buying your first home. This will make it easier for you and your mortgage broker. Start to collect and organize documentation:

• You should start to save and organize your pay stubs. You will often need the past 30 days worth of stubs.
• Go through your old tax returns and sort out your W-2s or 1099 forms. You will need the past two years W-2s/1099 and may need the past years complete returns
• Organize and gather your old bank statements. You may need these to show money to cover down payment and closing costs (last 2 months). These may also be used in lieu of other income documentation (12 months)
• If you have other assets, 401(k), Mutual Funds, Stocks, Life Insurance, etc. you may also need the past 2 months statements from those accounts.
• Check your credit. If you haven’t checked it yet, now is a good time. You can get one for free once a year. If you are working with a mortgage broker they may be able to sit down with you and go over your credit report. Start to clean it up if you can. If you have charge offs, or collections that you can pay off, or have already paid off, make sure they are accurately reporting.
• Save or get copies of your canceled rent checks. Most banks have an online check viewer. Print out or get copies from your bank of your rent checks for the past 12 months.
• If you have any student loans that are still in deferment, contact them and get a letter of deferment.

If you have experienced a major legal event that affects your finances such as a divorce or bankruptcy - keep all documents in a orderly and safe manner. There is a very good chance that some or all of the documentation from these proceedings will be needed in order to get you approved for the best possible mortgage loan. Borrowers with incomplete or missing documentation often get less favorable terms on their mortgage than ones who have such documents.

Congratulations! We would be happy to assist you on your pursuit of the American Dream.

Start saving. Having savings can help with approval in many ways. Additional funds strengthen your ability to be approved. It helps to show that you have reserves. The savings can also be used for a down payment and closing costs. There are also several out of pocket expenses you should expect to have such as the Earnest Money and Appraisal and/or Inspections. Ways to start saving:

• Pay your self first: This is a common savings technique. Pay your self first means the first thing you do on payday is put some money aside for your savings. This is a fine line you need to walk, don’t jeopardize your credit by missing payments.
• Direct Deposit: if your employer allows you to have multiple direct deposit accounts set one up for your savings account. You will miss the money less if you never see it to begin with in your checking account.
• Clip Coupons: If you don’t now, start. Every little bit of savings can help.
• Cut back on non-essential activities: Home cooking is always cheaper than going out, rent a movie rather than go to the theater, the rental is cheaper and so it the popcorn if you microwave it your self.
• Bring a bag lunch to work. If you go out to lunch or to a cafeteria every day that money can add up quickly.
• Quit or cut back on your vices. Quit smoking, besides being a healthy decision it is a smart financial decision. Do you like playing the power ball or those little scratch off tickets, put that little enjoyment aside until after you have the home.
• Cut back on your current bills. Can you do with out the full cable package for a couple months until you are in the new home? Can you do something to lower your other utility bills, lower the heat or air conditioning, or cut back on electricity and water use?

Pack a first night survival kit. Use one of your moving boxes and pack if full of things you may need your first night. Set this box aside or better yet put it in your car before you even go to closing. Your Survival Kit:

• Tools: Phillips and flat head screw driver, flashlight, pliers or wrench, utility scissors, straight edge razors (simple small tool kits can be bought for cheap at dollar stores, Ikea, and other general home stores)
• Home Essentials: Paper Towels, paper plates, plastic cups, plastic utensils, napkins, toilet paper, light bulb(s)
• Linens: towel(s), sheets, pillows, washcloths.
• Toiletries: soap, shampoo, toothbrush, hairbrush, toothpaste
• Misc: favorite board game, inflatable bed (or pool raft), reading material, deck or cards, not pad, pen, pencil, all purpose cleaner and sponge.
• Complete change of clothes or at least a change of underwear (remember what your mother always told you)

When buying your first home, or any home, please keep in mind that you will not always get the keys to your new house until the mortgage has been recorded with the county and the funding of all money has taken place. Read your purchase agreements carefully because sometimes there may be a specific date or time given that you will receive the keys after the closing (example: the buyer will receive the keys to the property 3 days after closing).

It’s possible you might not need all of the information above because some programs call for different documentation. Your Mortgage Broker’s task of find a mortgage for you will be much easier with this documentation close at hand and could mean the difference of closing on time or not closing on time. The more efficient you are the faster your loan process will be.

Determine how much mortgage you can afford. Start by analyzing you monthly spending. You should collect your current monthly spending data to see what portion of your income goes to necessary living expenses and what you can cut down on. Stop taking on new debt and trim your non-essential spending. Buying a big-ticket item or a new car can only hamper your dream of homeownership. Determine how much of your income can be allocated towards housing expenses, then consult a mortgage professional or use the mortgage calculators on this or other websites to determine how much mortgage can you afford. Be realistic, when estimating housing expenses, in addition to monthly mortgage payments, do not neglect other inevitable expenses such as property tax, homeowner insurance, maintenance and the occasional home improvement costs.

Other sites: Loan Officer | Delinquency | What not to do after you apply for a Mortgage | Why is my credit bad | MIP | VA | Fixed-rate mortgage| Pay Option Arm Calculator

Buying a house is much different than buying any other asset such as stocks, bonds, or mutual funds. There are more costs associated with buying a house and it will most likely be the biggest debt you take on in your lifetime. Buying a house has many tax advantages. To buy a house you will need to adhere to a simple process and it will take some effort on your part to ensure that the house buying process is smooth.

Perhaps the biggest part of buying a house is the financing. There are very few all cash offers. So take the time to work with someone you trust will do a good job. Make sure whoever you work with is familiar with all the expenses of owning a home. There are hidden costs to homeownership and your Mortgage Professional should be able to help you uncover those that will apply to you. If you need a first or second opinion you can always call me at anytime!

Buying a house is one of them most important decisions you will make in your life. Homebuyers should have a plan when deciding on purchasing a home. This plan should take into account their present situation and also future plans. Having a plan when buying a home will save buyers headaches down the road.

Make a budget and track all of your spending. See what you can live with and without. Then as you look at your budget, ask yourself if you can afford all that comes with a home, i.e. taxes and insurance. If you feel it’s right for you, then seek out a highly qualified mortgage professional.

It is very common for people to buy houses that they can qualify for, however they may end up way to expensive for the borrower. Just because you can qualify for a home worth $500,000 does not mean you need to buy a home for that amount. Have your mortgage professional provide an idea as to how much your payment would be on that mortgage. You know your finances better than anyone else and you know what your financial goals are better than your mortgage professional too. If you are trying to put 20% of your monthly income away towards investment and/or retirement accounts it probably would not be a good idea to buy a home that gives you too high of a monthly payment to continue to allow you to keep making your investments toward retirement. Know how expensive of a home you can afford while still allowing you to maintain a lifestyle that you are used to, and the financial goals that you desire. Work with a local mortgage professional to find out how you are able to qualify for a home and still keep your other finances steady and unchanged.

Think about how the house is going to fit into your overall lifestyle. Start by thinking about your situation in your career and personal life. Are you really ready to buy a home if you found the one you liked? How much space do you need to have? What areas of the community are you attracted to? Make a needs and wants list and to better prepare in finding a home that fits you, not the other way around.

Even if you aren’t going to buy a home right now, it is still good to educate yourself about the loan process, and what goes into getting a mortgage. It isn’t a simple process that can be completed in a few days. It usually takes around a month, and sometimes longer. You should have a trusted mortgage professional in mind ahead of time, so that you know who to go to when you are ready to buy a home.

The first thing you need to do is ask yourself “Am I ready to buy a house?” If the answer is yes, then you will need to contact a local mortgage professional that can pre-qualify you. The prequalification-qualification will tell you if you are able to purchase house, and the price range in which you should be looking. The mortgage professional will only give you an idea of the price in which qualify. Remember that you are the one who has to make the payments every month, and you are the one who has to feel comfortable with that payment. If you are in need of becoming pre-qualified, feel free to email me at .If you are not ready to buy a house, that is ok too. Purchasing a home is something that has to be done when you feel like you are ready for the responsibilities that come with home ownership.

In some states, it is customary to have attorneys handle real estate transactions. For home buyers in those states, to protect what may be the largest investment in life, it is prudent to hire a lawyer experienced in real estate transactions soon after the subject property is found. Some of the attorney’s responsibility include drawing up the contract, ordering title search on the property, and accompanying the buyer to the settlement.

You should always bring your loved ones or the people who will be living with you as to get their opinion if they like the house as well. Since a home purchase is not something you can change your mind on after you remove contingencies without losing deposit money.

• GET PRE-APPROVED: Always speak to a Mortgage Professional first to make sure you know what you can qualify for.
• BEGIN VIEWING HOMES: Work with a reputable Real Estate Agent to find the right home
• PUT AN OFFER: An offer requires Earnest Money so be prepared to put money down
• REVIEW LOAN OPTIONS: Today there are many loan options to choose from, discuss them with your Mortgage Professional
• GET HOME INSPECTED: If your home has problems, you want to identify them immediately
• GET HOME APPRAISED: An appraisal gives your home a monetary value
• CLOSE ON YOUR HOME AND LOAN: There are two separate closings, changing ownership and closing on your loan.

Money put down by a potential buyer to show that he or she is serious about purchasing the home; it becomes part of the down payment if the offer is accepted, is returned if the offer is rejected, or is forfeited if the buyer pulls out of the deal.

Earnest money is typically held in an escrow account of the real estate agent and deposited once an offer has been accepted by both parties.

Be certain to read your home purchase agreement to determine what your options are regarding the treatment of your earnest money deposit in the event of a cancellation or other condition.

If the buyer defaults on the sales contract in many cases the buyer will have to forfeit their earnest money.

If purchasing a FSBO property, make sure the earnest money check is made out to the title company and not the seller.

If possible obtain a copy of the check for your mortgage broker, the lender will need a copy!

In Lien Theory states such as Texas, they use title companies, owned by Real Estate Attorneys to close real estate transactions. The title company in this case would be the one to hold the earnest money in the escrow account until closing.

If you obtain 100% financing, your earnest money will be used towards your closing costs.

Earnest Money is never distributed to the seller until settlement. It is held by the real estate broker, or in states where it is customary to hire the services of attorneys for real estate transactions, in the seller attorney’s escrow account, only to be disbursed to the seller, along with the remainder of the proceeds, at closing. Typical Earnest Money is between 5% to 10% of the purchase price. However, any other amount can be negotiated. A good purchase contract always stipulates that the purchase agreement is contingent upon the homebuyer’s successful procurement of a mortgage. In the case the home buyer applied for and was denied financing, the Earnest Money is promptly returned to the buyer.

The deposit you give a seller with an offer to purchase is sometimes called a binder, a deposit, or earnest money. The way your deposit is handled depends on the laws in your state, but there are some basic guidelines that are followed everywhere in the U.S.

At the time of closing on a property, earnest money is disbursed as directed by the buyer; usually credited toward the selling price of the property. If for some reason the transaction does not close, the funds can be disbursed to either the buyer or seller, depending on the reason the closing did occur.

Earnest money amounts differ depending on the seller and the seller’s realtor. They may also ask for a larger earnest deposit if it looks like the buyer may take some time to close the mortgage transaction. This is an incentive for the seller to not take other offers.

A sum of money paid towards estimated initial mortgage processing expenses such as appraisal and credit report.

Not all mortgage providers have application fees, check with your loan professional about their policy.

Your application fee should be disclosed on the good faith estimate that you receive after you have applied for your loan.

Application fees are very common and are generally non-refundable.

Application fees are just one of the many initial out of pocket fees you may be expected to pay in a purchase. You should also be prepared to pay a deposit fee or earnest money deposit with the bid on a house, if you get a home inspection, radon test, pest inspection, appraisal, etc. you may be expected to pay the fee for those services up front as well.

Application fees generally range anywhere in price from $200 to $1000.

Often you can negotiate your application fees.

Other sites: Broker Outpost | Increasing your homes value | Closing Costs | Selling your home with a real estate agent | Why is my credit bad | MIP | FSBO| Pay Option Arm Calculator

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