Buying a home is part of the American dream. It is a significant long-term investment that often represents the foundation of our lives, providing financial and emotional security. It is also the largest single transaction most people ever make. That’s why, I believe it’s so important to choose a home and a mortgage that are well suited to your needs. This series of posts is designed to help you learn about the home buying process, so that you can make informed decisions.

But you don’t have to do it alone. Whether you decide to use online tools or rely upon this series of articles  to help. It is a good idea for you to understand your mortgage options and how much they may cost so you can make an educated decision about the home financing package that best fits your needs.

Why Buy Instead of Rent?

Decades after the phrase “the American dream” was first coined, homeownership is still a meaningful goal for a large number of individuals and families. Buying a home is considered by many to be a wise investment because typically, houses increase in value over time. And, as the years go by, you can build ownership interest, called equity, which you can borrow against. In contrast to renters, most homeowners receive significant tax breaks, because interest paid on a home mortgage is almost always tax deductible. You will want to consult your tax advisor regarding deductibility of interest. Finally, there’s the personal satisfaction of having a home you can call your own to share and enjoy with friends and family.

So Where Do You Start?

I typically recommend potential homebyers begin by asking their mortgage professional key questions such as:

  • What is a mortgage?
  • What does my mortgage payment include?
  • How do I qualify for a mortgage?
  • How much home can I buy?
  • How large of a loan can I be approved for?
  • How important is my credit history?
  • How much do I need for a down payment?
  • What about closing costs?
  • What kinds of mortgages are available?
  • What are my possible financing choices?
  • Which loan is right for me?
  • Are there any tips to consider when loan shopping?
  • How important is preapproval?
  • Who will approve my application?
  • What happens after I apply?

This homebuyer series is intended to answer many of these questions and helps you become more comfortable with the homebuying process. It was designed as a reference tool and will include a useful glossary. I will also included valuable checklists that can help with your home shopping process.

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One thought on “First-Time Homebuyer’s Guide – Part 1

  1. A lot of shoppers these days are looking to services like zillow.com to point them towards the best buys in their chosen area. But zillow, et al., are not the reliable source they used to be because of the bubble burst. Appraisals are out of whack and lenders are sure going to demand new ones before a purchase. How can this work in the buyer’s favor?

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