Your Money Matters: Buying First Home Need Not Be Overwhelming (NAPSA)—Are you one of those people who considers life pretty good? You're thinking about getting married and you have a good job, a nice car and money to pay off the student loans. You have spare time to spend hangin’ out with yourfriends. The only negative in your life right now is having to pay rent and dealing with roommates. For many Americans in their late 20s and early 30s, the “whoosh” sound of paying rent each month eventually turns to thoughts of owning their own piece of the American dream. However, the process of overwhelming—even daunting— Many mortgage lenders recommend that first-time homebuyers have at least three to six months in additional savings before applying for a mortgage. control’ during the whole home- a significant impact on his or her mortgage loan approval and interest rate. A good first step in actually buying a home can seem to some. “First-time homebuyers can feel intimidated by or even ‘out of buying process,” says Jim Fer- the home-financing process is to riter, executive vice president for GMAC Mortgage. “But there’s hope. An experienced loan officer, combined with innovative products and services, can help first- check your credit history. You can request a free credit report from any of the three credit-reporting bureaus: Equifax, TransUnion or stand their financing options and boost their confidence in purchasing their first home.” Ferriter, who has more than 25 reporting bureaus to correct any misinformation. time homebuyers better under- years’ experience in mortgage lending, offers the following tips for first-time homebuyers: 1. Save, Just A Little Bit More—Ofcourse it’s important to save moneyfor the down payment andclosing costs. But there’s more to buying a home than figuring out if you can pay a monthly mortgage payment. There are costs similar to renting, but now you must be prepared to maintain a home, too. Weekly shopping trips to your local big-box homestore to purchase everything from decorat- ing items to a lawn mower can add up quickly. That’s why many mortgage lenders recommendthat first-time homebuyers have at least three to six months in additional savings. An excellent way to save cash is with a money market account from GMAC Bank (www.gmacbank.com), which can be opened with aslittle as $50. 2. Check Your Credit—An individual’s credit score will have Experian. Carefully review your report and contact the credit- 3. Get Preapproved—Before you start working with a real estate agent, consider contacting a mortgage lender to obtain a preapprovalcredit decision. A loan officer will review your financial status, including your income, cash flow and credit score, to help you determine the maximum monthly housing payment for which you may be able to qualify, and, if qualified, “preapprove” your mortgage before you’ve found a home. Armed with a credit preapproval, you can start searching with a much better idea of the price range you should be looking in, and in turn save time as you'll know the right homesto focus on. As you start thinking about and preparing for the preapproval process, start shopping for the mortgage lender from which you would like to obtain a mortgage for your new home. Because this process is new, it’s easy to go with the first lender or loan officer you meet. Instead, take your time and shop around. Start by asking friends, co-workers and family members for recommendations. When you’ve identified two or three loan officers, ask for references. Remember, obtaining a preapproval may offer more confidence and certainty to home sellers. In addition to pricing (interest rate and closing costs), focus on customer service as well as other services and tools that a mortgage lender may be able to offer you. For example, in addition to offering the preapproval program, GMAC Mortgage offers a feature called “HomeCommand,” which allows you to cap a mortgage rate for up to 126 days while you shop for your dream home, as well as a free home-finder service that can give you a jump on other house hunters, alerting you to homes that hit the market that match your searchcriteria. 4, Don’t Be Afraid To Ask Questions—Once you’ve found your new home, the mortgage lender will help you through the details of the loan process. From application to closing, your loan officer will work through the financing process with you, just as your real estate professional will in the home-buying process. Your mortgage loan officer can also be a valuable source of information, so be sure to take advan- tage of his or her expertise. Throughout the process, read all loan documents carefully and involve an attorney,if necessary. 5. Inspect It—Before you commit to purchasing a home, don’t forget to hire a licensed home inspector to conduct a thorough assessment of the property. An inspector can alert you to any major problems with the home, and/or help you understand potential short-term and long-term home maintenanceissues. Buying a home for thefirst time can seem like you're riding on a roller coaster. But by doing your homework, asking lots of questions and taking your time, you can stay in control and dis- cover an overwhelming sense of accomplishment in buying your first home.
