First Time Home Buying Tips

First time home buying can be filled with trials and tribulations, but there is no finer feeling of accomplishment in the world when you sign those last forms and call it home.

Everyone wants a home to call their own. It brings a sense of pride, prestige, accomplishment, and purpose to you and your family's life.

So, how do you go about accomplishing this dream? It's a lot easier than you may think. However, be prepared, because the process and long, and usually slow.

First things First

Step one in your pursuit of this American dream is to obtain and maintain good credit ratings. Now, the way to do this, of course, is to not have too many outstanding debts, and a good payment history (No late payments or defaulting on financial responsibilities). However, if this is not possible for you, there is still hope.

1. Obtain your credit report

There will be three companies reporting and you should request all three. There should not be a charge involved, the reports should be free upon request.

2. Report any incorrect information to the credit bureau immediately. If you find that you have items on your report that are not yours, don't shrug it off! These must be cleared as soon as possible. This happens a lot more than most people realize, so check your report closely.

3. Work on paying off any outstanding debt, within reason. If you have small credit card debts, pay these off first. Pay off any old medical fees, book / music club charges, etc. When you find your dream home, you don't want to let credit stand in your way. Don't be discouraged if you have a lot of debt. Just work towards putting it all into some sort of perspective.

4. Research your local mortgage companies and banks to find the best rate available. Once you choose the best company or bank for your family, get their mortgage application package and complete. Turn it in and wait for your pre-qualification notice.

5. If you are pre-qualified there will be an amount set on paper. Now comes the fun part. Search neighborhoods, local papers, newspapers, and just drive until the perfect home finds you. (Err, that is, until you find the perfect home) If you do not pre-qualify, return to step 3 and work on it some more. Consider debt consolidation if your loan to debt ratio is too high. Don't give up, home ownership is within your reach.

6. Once you find the home you want, contact the agent (or owner) and sign an earnest money contract. This is a form stating that you have full intention to purchase the home. This will take the home off of the market, and will assure you that you will be able to buy it, if your loan is approved. Note: You will be asked to pay money to "hold" the property. This is routine, and not a scam. The amount will vary, however it will more than likely be from $200 - $2000. Ask your agent for details.

7. Gather together all of your pertinent information (wage statements, pay checks, W2 forms, previous IRS returns, rent receipts, everything!) You will be asked to provide a ton of paper work, and then required to sign another ton worth. This is also normal, even if it is aggravating. Think of it as one more pen stroke towards your new dream home.

8. Once your loan is approved, after all appraisals and surveys have been completed, and income and credit verified, the closing date will be announced. This is an exciting time, so don't be discouraged if last minute requests change your closing date one or two or ten times. This is a normal part of closing, just keep your sanity, hold on to your paper work, and wait it out. This too shall pass.

9. Go to closing with the requested amount of money for closing fees and down payment, prepare to sign a million forms, and, therefore, eat a good, solid lunch to hold you over.

10. Sign your name, hundreds of times, hand over your money, and walk out of that office the official new owner of an American Dream.

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