Mortgage rates are at historic lows and home prices have dipped in many areas below 2006 levels. If you'd considered buying a home but have been on the fence, now is a good time to get off the fence and look seriously. HSH.com expects a rise in mortgage rates within the next few months, especially for fixed-rate mortgages.
Ready to get going, but not sure how the home loan and purchase process works? Here is a checklist to demystify the process.
Three Steps to Your New Home
Step 1: Get Organized. Gather all your financial paperwork together: two years' worth of tax returns and tax forms, recent pay stubs, and statements from all your deposit accounts, retirement accounts, and investment accounts. This is information mortgage lenders will need to accurately prequalify you for a home loan.
Step 2: Get Connected. Finding the right mortgage is as important finding the right home. To find the right mortgage, find a mortgage professional you can work closely with. Have a mortgage lender contact you with quotes, or ask family, friends, and coworkers for the names of mortgage professionals they trust. Ask lots of questions of the mortgage lender--inquire about what programs and rates he or she recommends and why they are the best for you. Work with your mortgage lender to determine a sales price, down payment amount, and mortgage product that will finance your new home.
Step 3: Get Looking. Chances are you will be using a 30-year mortgage to purchase a new home. Whether it is an FHA home loan or conventional home mortgage, there are likely homes in your price range in your metro area. Make a list of the top three items your home must have (for example, "three bedrooms, two-car garage, near church"), and any aspects of a home that you definitely do not want (perhaps multiple stories or a small kitchen). Give this list to a local real estate agent whom you trust and have them guide the search for your new home.
FHA for Lower Down Payment
Our current rate environment offers the lowest mortgage rates in decades. If you want to get today's mortgage rates but are concerned that you don't have enough money saved for a down payment, contact an FHA-approved lender or broker about an FHA-backed loan requiring a lower down payment.
About the Author
Dennis C. Smith is co-owner and broker of record for Stratis Financial in Southern California. With over twenty years experience in the mortgage industry he has helped thousands of families purchase homes. Dennis has a degree in Economics and Political Studies from Pitzer College and is married with two children.
