CONGRATULATIONS!  
You have decided to buy a new home.

You probably started the home buying process in one of two ways; you saw a home you were interested in buying or you consulted a lender to figure out how much money you could borrow before you found a home (sometimes called pre-qualifying).  The next step is to sign an agreement of sale with the seller, followed by applying for a loan to purchase your new home.  At each of these steps you often have the opportunity to negotiate the terms, conditions and costs to your advantage.  There is no standard home buying process used in all localities.  Your actual experience may vary through those described here.

SALE PRICE.

For most home purchasers, the sale price is the most important term.

SHOPPING FOR A LOAN.

Your choice of lender and type of loan will influence not only your settlement costs, but also the monthly cost of your mortgage loan.

TYPES OF LOANS.

Loans can have a fixed interest rate or a variable interest rate.  Fixed rate loans have the same principal and interest payments during the loan term.  Variable rate loans can have anyone of a number of “indexes” and “margins” which determine how and when the rate and payment amount change.  If you apply for a variable rate loan, also known as an Adjustable Rate Mortgage (“ARM”), a disclosure and booklet required by the Truth in Lending Act will further describe the ARM. Most loans can be repaid over a term of 30 years or less have equal monthly payments. The payment amounts can change from time to time on an ARM depending on changes in the interest rate. 

                                                                                                                    Some loans have short terms and a large final payment called a “balloon”. If you plan to only be in your home a short period of time perhaps a 3, 5, or 7 yr loan term is the best program, for you as these programs have a lower interest rate as opposed to a 30 year fixed. You should shop for the type of home mortgage that best suits your needs. Depending on your circumstances there are different types of loan programs that might best suit your needs i.e.  For a loan that not only pays for the complete purchase amount but also covers your closing costs or another program is to have the seller cover some of your closing costs. Again it all depends on your circumstances, credit rating, ability to save etc. Call one of our loan consultants who can see which program best suits your needs.

You may be eligible for a loan insured through the Federal Housing Administration (“FHA”) or guaranteed by the Department of Veterans Affairs or similar programs operated by cities or states. These programs usually require a smaller down payment.  Ask lenders about these programs.

There are several federal laws which provide you with protection during the processing of your loan. The Equal Credit Opportunity Act (“ECOA”) the Fair Housing Act and the Fair Credit Reporting Act (“FCRA”) prohibit discrimination and provide you with the right to certain credit information.

The information provided above was intended to give you a little insight into the purchase of your NEW HOME Good luck from the staff of HOME SAVINGS MORTGAGE.