Picayune MS Homes For Sale - Pearl River County Homes » Buying A Home

Buying Your First Home? Here’s What You Need to Know

PRC Homes — Thu, 29 Jul 2010 04:44:33 +0000

By Michelle Fradella, Broker – Pinnacle Real Estate Services, LLC

You’ve made the decision to make one of the largest investments you’ll ever make in your life-buying your first home. You’re excited, but at the same time anxious. Some of the questions you may be asking are: Will I be able to afford the home of my dreams? Do I have enough money for a down payment? Can I get a home inspected before I make an offer?

The homebuying process can be overwhelming, but if you go into it prepared, your first purchase can be a good experience. Here are some things to consider before making the plunge.

Getting a mortgage-Fear of being rejected for a home loan is one of the main concerns for first-time homebuyers. To lessen the stress, you may want to get pre-approved for a loan before looking at prospective homes. This will not only help you feel more confident, it will also give you an advantage when there are multiple offers for a specific home. The fact that your loan has already been approved is of great value to the seller: because it shortens the purchase process and there is less of a chance that the buyer will back out of the sale.

Mortgage Payments-The costs involved in the purchase of a home can be overwhelming to first-time buyers. However, with the help of a real estate professional, you can calculate out how much they you be able to pay each month in mortgage payments, and from there, what prospective homes offer a feasible payment plan.

Down-Payment-The down-payment amount varies depending on the value of the home you choose and your mortgage lender. And in some cases, first-time home buyers can purchase a home with no money down. Although it varies from state to state, most offer government-funded programs for first-time buyers that help people buy a home with no down-payment. Your real estate professional will be able to explain the different options available to you.

Closing Costs-First-time buyers often forget to consider the closing costs when making an offer on a home. Paying closing fees of up to 10 percent of the home sale amount is not unusual. Add that to the down-payment and you’ll have quite a sum to raise before the final papers can be signed. However, a smart first-time buyer takes this into account before making an offer, and with some professional help, the costs can be estimated in advance.

Making offers-Don’t feel pressured into making an offer on the first home you see. This is a common mistake of many first-time homebuyers. Make sure you view different homes to get a feel for the marketplace. When you do decide on a home to make a bid on, work with your real estate professional to get all of your questions answered first before making an offer. But don’t wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal.

Condition of the Home-Buying a “problem” home is another fear of first-timers. A home that needs major repairs can become a costly venture. And, unless the asking price is adjusted to reflect the hidden repairs needed, chances are the home is not worth as much as the seller is asking for it. To avoid unfortunate surprises, your real estate professional may advise you to hire a home inspector before making a serious offer. That way, you know what you are getting into.

Above all, remember that there are no silly questions. Make sure you understand and are comfortable with every aspect of the transaction. Your real estate professional can be an invaluable asset in helping you make educated decisions so that your first-home purchase is a rewarding experience.

8 Ways To Improve Your Credit

PRC Homes — Thu, 29 Jul 2010 04:23:30 +0000

1. Check for and correct errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

2. Pay down credit card bills. If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score.

3. Don’t charge your credit cards to the maximum limit.

4. Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

5. Don’t purchase big-ticket items for your new home on credit cards until after the loan is approved. The amounts will add to your debt, and this could affect your credit score, and/or debt-to-income ratio on your pending loan.

6. Don’t open new credit card accounts before applying for a mortgage. Having too much available credit can lower your score.

7. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation. To obtain a complete copy of the publication, “Knowing and Understanding Your Credit,” visit http://www.homebuyingguide.org.

8 Steps to Getting Your Finances in Order

PRC Homes — Thu, 29 Jul 2010 04:08:21 +0000

1. Develop a Family Budget. Instead of budgeting what you’d like to spend, use receipts to create a budget for what you actually spent over the last six months. One advantage of this approach is that it factors in unexpected expenses, such as car repairs, illnesses, etc., as well as predictable costs such as rent.

2. Reduce Your Debt. Generally speaking, lenders look for a total debt load of no more than 36 percent of income. Since this figure includes your mortgage, which typically ranges between 25 percent and 28 percent of income, you need to get the rest of installment debt—car loans, student loans, revolving balances on credit cards—down to between 8 percent and 10 percent of your total income.

3. Get a Handle On Expenses. You probably know how much you spend on rent and utilities, but little expenses add up. Try writing down everything you spend for one month. You’ll probably see some great ways to save.

4. Increase your income. It may be necessary to take on a second, part-time job to get your income at a high-enough level to qualify for the home you want.

5. Save for a down payment. Although it’s possible to get a mortgage with only 5 percent down—or even less in some cases—you can usually get a better rate and a lower overall cost if you put down more. Shoot for saving a 20 percent down payment.

6. Create a house fund. Don’t just plan on saving whatever’s left toward a down payment. Instead decide on a certain amount a month you want to save, then put it away as you pay your monthly bills.

7. Keep your job. While you don’t need to be in the same job forever to qualify, having a job for less than two years may mean you have to pay a higher interest rate. 8. Establish a good credit history. Get a credit card and make payments by the due date. Do the same for all your other bills. Pay off the entire balance promptly.

7 Reasons to Own Your Own Home

PRC Homes — Thu, 29 Jul 2010 03:57:27 +0000

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, property taxes you pay, and some of the costs involved in buying your home.

Gains.

2. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

3. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

4. Predictability. Unlike rent, your mortgage payments don’t go up over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will rise.

5. Freedom. The home is yours. You can decorate any way you want and be able to benefit from your investment for as long as you own the home.

Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity.

To calculate whether renting or buying is the best financial option for you, use this calculator courtesy of Ginnie Mae: http://www.ginniemae.gov/rent_vs_buy/rent_vs_buy_calc.asp?Section=YPTH

5 Reasons You Need a REALTOR®

PRC Homes — Thu, 29 Jul 2010 03:12:24 +0000

A real estate transaction is complicated. In most cases, buying or selling a home requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page government-mandated settlement statements. A knowledgeable guide through this complexity can help you avoid delays or costly mistakes.
Selling or buying a home is time consuming. Even in a strong market, homes in our area stay on the market for an average of 150 days. And it usually takes another 45 days or so for the transaction to close after an offer is accepted.
Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with someone who speaks that language.
REALTORS® have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. That’s why having an expert on your side is critical.
REALTORS® provide objectivity. Since a home often symbolizes family, rest, and security, not just four walls and roof, homeselling or buying is often a very emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you keep focused on both the business and emotional issues most important to you.

REALTORS®are members of the NATIONAL ASSOCIATION OF REALTORS®, a trade organization of more than 1 million members nationwide. REALTORS® subscribe to a stringent code of ethics that helps guarantee the highest level of service and integrity

5 Factors That Decide Your FICO Score

PRC Homes — Thu, 29 Jul 2010 03:05:39 +0000

Credit scores range between 200 and 800. Scores above 620 are considered desirable for obtaining a mortgage. These factors will affect your score.

Your payment history. Whether you paid credit card obligations on time.
How much you owe. Owing a great deal of money on numerous accounts can indicate that you are overextended.
The length of your credit history. In general, the longer the better.
How much new credit you have. New credit, either installment payments or new credit cards, are considered more risky, even if you pay promptly.
The types of credit you use. Generally, it’s desirable to have more than one type of credit—installment loans, credit cards, and a mortgage, for example.

For more on evaluating and understanding your credit score, go to http://www.myfico.com.

15 Tips for Packing Like a Pro

PRC Homes — Thu, 29 Jul 2010 02:34:56 +0000

1. Plan ahead by organizing and budgeting. Develop a master “to do” list so you won’t forget something critical. To estimate moving costs, use a moving calculator.

2. Sort and get rid of things you no longer want or need. Have a garage sale, donate to a charity, or recycle.

3. But don’t throw out everything. If your inclination is to just toss it, you’re probably right. However, it’s possible to go overboard in the heat of the moment. Ask yourself how frequently you use an item and how you’d feel if you no longer had it. That will eliminate regrets after the move.

4. Pack like items together. Put toys with toys, kitchen utensils with kitchen utensils. It will make your life easier when it’s time to unpack.

5. Decide what, if anything, you plan to move yourself. Precious items such as family photos, valuable breakables, or must-haves during the move should probably stay with you. Don’t forget to keep a “necessities” bag with tissues, snacks, and other items you’ll need that day.

6. Use the right box for the item. Loose items are prone to breakage.

7. Put heavy items in small boxes so they’re easier to lift. Keep weight of each box under 50 pounds, if possible.

8. Don’t over-pack boxes. That will increase the chances that items inside the box will break.

9. Wrap every fragile item separately and pad bottom and sides of boxes.

10. Label every box on all sides. You never know how they’ll be stacked and you don’t want to have to move other boxes aside to find out what’s there.

11. Use color-coded labels to indicate which room each item should go in. Color-code a floor plan for your new house to help movers.

12. Keep your moving documents together in a file. Including important phone numbers, driver’s name, and moving van number. Also keep your address book handy.

13. Back up your computer files before moving your computer.

14. Inspect each box and all furniture for damage as soon as it arrives.

15. Remember, most movers won’t take plants. If you don’t want to leave them behind, you should plan on moving them yourself.

5 Common First-Time Homebuyer Mistakes

PRC Homes — Thu, 29 Jul 2010 02:24:24 +0000

They don’t ask enough questions of their lender and miss out on the best deal.
They don’t act quickly enough to make a decision and someone else buys the house.
They don’t find the right real estate professional who is willing to help you through the homebuying process.
They don’t do enough to make their offer look good to a seller.
They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.

10 Steps to Prepare for Homeownership

PRC Homes — Thu, 29 Jul 2010 02:18:38 +0000

Decide how much home you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.
Develop a wish list of what you’d like your home to have. Then prioritize the features on your list.
Select three or four neighborhoods you’d like to live in. Consider items such as schools, recreational facilities, area expansion plans, and safety.
Determine if you have enough saved to cover your down payment and closing costs. Closing costs, including taxes, attorney’s fee, and transfer fees average between 2 percent and 7 percent of the home price.
Get your credit in order. Obtain a copy of your credit report.
Determine how large a mortgage you can qualify for. Also explore different loans options and decide what’s best for you.
Organize all the documentation a lender will need to pre-approve you for a loan.
Do research to determine if you qualify for any special mortgage or down payment assistance programs.
Calculate the costs of homeownership, including property taxes, insurance, maintenance, and association fees, if applicable.
Find an experienced, full-time REALTOR® who can help you through the process.

Buying a Home – Three Mistakes to Avoid

PRC Homes — Fri, 08 Jan 2010 04:13:44 +0000

Buying a home is often a stressful process, because it is usually the single largest purchase of your life. Even if it isn’t your first house, it’s easy to make a mistake that costs you hundreds or thousands of dollars. Here are three common mistakes to avoid.

1. Paying Too Much

This isn’t about over-paying for a particular home. That mistake is tough to make if you will be borrowing to buy. An appraisal will be done, and the lender will probably refuse to lend enough for you to buy an over-priced house.

The common mistake here is following the advice of real estate agents, lenders and even your friends and family, who will often encourage you to buy a more expensive home than you can afford. They may call it an “investment” and claim that real estate always goes up in value, so you should get as much as you can. Of course, recent history shows that home values don’t always go up, and this kind of thinking has a lot of families facing foreclosure now.

Buy what you feel comfortable with. If you can’t easily make the payments, even after a short layoff from work, you may be overextending yourself. And watch out for lenders “solutions” to this problem (see number 2).

2. Trusting Lenders

I am not suggesting that lenders are all out to get you, or that you should look at them suspiciously, but they are not necessarily looking out for your best interest. That’s your job. Their’s is to sell loans. Buying a home normally requires buying a loan too, and as we can see now (2008), many loans are not suitable if you want a secure future. While there are sometimes good reasons for interest-only, adjustable-rate, and zero-down loans, most of the time these should be avoided.

Never mind what a lender recommends or suggests. Ask him only for facts, and do your own math. If the rate on your loan goes from 5% to 10%, what will the payments be? Can you easily afford that? If not, you are taking a risk that may not be justified.

3. Trusting Real Estate Agents

When you are buying a home, the real estate agent who helps you, like the lender, has his own agenda. It isn’t that he or she doesn’t wish you the best, but they wish even more for their own families, so the primary goals is to sell something. Also, unless the agent is explicitly working for you, she has a fiduciary responsibility to work against you if that is what is best for the seller. In other words, if she thinks you will pay more because of a comment you make, she must pass that information on to the home owner.

Even a buyer’s agent can be biased. It is nice to think that they are working for you, but they still only get paid (typically) when a sale is made. That’s a pretty motivation to push you into a home fast, whether or not it’s the best one for you.

Pay attention to whether an agent is really showing you the houses that suit your needs, rather than the ones that he or she would buy. Many real estate agents don’t listen very well, and will show you what they think you want, rather than asking you more questions. They can lead you to buy a house that doesn’t suit your needs or costs more than you want.

One final note about real estate agents: They are not experts on all things. In fact, some are barely an expert on anything. I have met agents who didn’t understand a simple seller-financing offer, and others who suggested that cracks in foundations were “no big deal,” though they knew nothing about construction. Unless an agent has specific experience in an area, take what they say with a grain of salt, and seek out other counsel.

Buying a home that actually is right for you starts with avoiding the three mistakes above.

Copyright Steve Gillman. To see a photo of the house we bought for $17,500, get a free ebook on Buying A Home For Less, and a free real estate investing course, visit: http://www.HousesUnderFiftyThousand.com
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