How to Buy a House
If you are looking for how to buy a house information, you have come to the right place! As a real estate investor, I speak with people nearly every day who are overwhelmed and confused with house buying options. Many of the people I talk to are first time home buyers who are concerned about the real estate market and uncertain if now is a good time to invest.
The first step of how to buy a house requires buyers to determine how much they can afford. This can be accomplished by talking to a realtor or mortgage specialist who can pull your credit history to determine if you qualify for financing. In order to buy a house today, borrowers must possess a high FICO score and solid employment history. However, various types of financing are available to individuals with less-than-perfect credit.
While obtaining financing through a traditional lender is the preferred method for buying houses, many sellers offer seller carry back mortgages. This financing option allows buyers with poor credit the chance to rebuild their credit and take advantage of tax credits.
The majority of seller carry back trust deeds involve providing a down payment to the seller, who in turn carries all or part of the home loan financing. A typical seller carry back transaction would involve providing a 5- to 10-percent down payment and obtaining a conventional home loan for 70- to 80-percent of the real estate purchase price. The seller carries the remaining 10- to 20-percent balance.
Seller carry back mortgages generally last between three and five years. Afterwards, buyers must refinance mortgages through their lender. It is crucial for buyers engaged in seller carry back mortgages to pay on time and in full each month. Mortgage payments should be made with a personal or certified check which can easily be verified through lenders to show a consistent payment history.
Another how to buy a house option is rent-to-own properties. Similar to seller carry back mortgages, borrowers can rebuild or establish credit. Tenants reside in the home for two or three years and a portion of rent monies are contributed toward purchasing the home. Once the contract expires, borrowers can obtain financing for the remaining balance.
Most rent-to-own homes involve providing a small down payment to the homeowner. In order to be valid, legal real estate contracts must be executed. It is best to retain the services of a real estate attorney to ensure both parties are covered in case of default.
Individuals who possess sufficient credit to obtain a home loan can take advantage of various first time home buyer programs and financing options offered through Fannie Mae, HUD, FHA and VA loans.
The Department of Housing and Urban Development offers multiple home buying programs which vary by state. HUD offices are located nationwide and offer housing counseling and FHA Homeownership programs to those who qualify. Additional information on home loan financing and housing counseling services are available at HUD.gov.
We invite you to learn more about how to buy a house and various financing techniques in our home buying article library. We offer hundreds of real estate articles on a variety of subjects including: first time home buyer tips, how to buy a house with poor credit, and investing in distressed properties. New articles are added on a weekly basis, so take a moment to subscribe to our mailing list to be instantly notified of newly published home buying information.
Published on March 01, 2010 at 02:42 AM
| | Printer friendly