I am thinking of buying a home, what should I know, how should I finance it?

Answer 1

Ask yourself and answer honestly;

Why do you want to buy a home? American dream? That's what people do? Tax deduction? None of those are good reasons.

How much do you have to put as down payment?
Can you save another 5 years and have more money to put down?
What are you long term goals and how does a house figure into those goals.
You need to stay in a house at least 7 years before you can realistically hope to break even when you sell it.
Are you willing to purchase a house that is below what the banks tell you you can afford? The formulas these days actually allow people to borrow more money than they really should. Banks are afterall trying to make money on you; not help you.

The old American dream is mostly a sham. Put yourself in control of you life don't let fad, ads, and status quo be in control of you.

Buying a house is a good thing; make sure you know fully why you want it; how much house you can truly afford, and keep your long term goals in view when making all those important buying decisions.
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Answer 2

I've been a residential Realtor for over 8 years so I have plenty of experience in this area.

First off, get recommendations from a couple of friends as to who their loan officer was. Secondly, take a look at your bank. Thirdly, take a look at local mortgage brokers. A lot of times, mortgage brokers will even beat your local bank using that banks mortgage department. I don't know how they do it but they do!!

You CAN SHOP a mortgage just like anything else. If you have any credit blemishes, some companies will be tempted to make it seem to you like you're going to have to take a beating on rates so you can get the home. That's not necessarily true. What some companies want to reem you for, others forgive. And always remember, the loan officer gets paid more for giving you a higher rate in most instances.

Don't go with the first guy you talk to and make sure that he or she knows that you are shopping rates. He or she will be more likely to not get too greedy.

And before you sign anything after you've made the application, make sure you get a GOOD FAITH ESTIMATE!!! That ensures that they don't tells you 7% and then you get to the closing and it's 10%!

Also, IF YOU PLAN ON REFINANCING WITHIN THE NEXT FIVE YEARS, DON'T PAY POINTS!!! The money you spend on points will not be justified in the event of a fairly soon refinance!!!

Good Luck!

Answer 3

For first time home buyers an FHA loan is a good bet. They typically only require 3% down. Talk to a mortgage broker in your area and judge what they say vs. what you can read online at FannieMae.com