6 Things To Make You STOP PAYING RENT

or what you need to know
to get you started toward buying your 1^st home!

People often fear that which they don't understand.  One of the most common examples is the fear of buying a home, and the seemingly complicated and endless process that accompanies a home purchase.  In fact, studies have shown that this fear literally prevents some people from taking the first steps to buying a home.  The trepidation is likely to be even more intense for individuals purchasing homes by themselves.

Buying a home is probably the largest purchase a person will ever make.  And for first time buyers, a group that is becoming more prominent in the home purchase market, this purchase is even more intimidating because you are taking the full responsibility upon yourself.  Prospective buyers should take advantage of the wealth of home buying information and programs out there.

To prepare, you should do research and be fully informed before beginning the search for a dream home.  Here are six steps to get started:

1. Before you start your house search, think carefully about what it will be like to be a homeowner.  For most people, homeownership is an integral part of the American dream and the advantages (tax benefits, sense of home, financial investment) far outweigh any drawbacks.

2. Your credit history is one of the first things a mortgage lender will look at in making a decision on your loan.  Contact one of the three major credit-reporting agencies to obtain a credit report.  Review it carefully to be sure all the information is correct.  If you find discrepancies, you should work with the credit agencies to resolve them.

3. Saving for a down payment is one of the biggest barriers to homeownership.  Mortgage lenders recognize this dilemma and many now offer low down payment loans.  Three and five percent down payments are commonly available, and there are some loans that require no down payment.

4. Before you begin working with a Realtor^®, first go to your local lender and ask them to pre-approve, not prequalify, you for a mortgage.  Most lenders will provide this service free of charge or simply charge for the credit report which is usually around $15-20 dollars.  Pre-approval will let you know exactly how much you can spend on a home purchase BEFORE you start your search.  A preapproval in hand also makes you a more attractive buyer when you are ready to make an offer on a home, as a home seller is more likely to accept an offer from a buyer who can demonstrate the ability to secure financing.

5. Many cities and counties offer down payment assistance programs for borrowers meeting certain eligibility requirements.  Investigate these by calling your local housing department.  You may also want to check with your mortgage lender and possibly local nonprofit housing organizations as well, to see if there are assistance programs in your area.  Down payment assistance programs may take the form of "silent seconds," which are loans you take in addition to your mortgage to help make the down payment.  Many times, silent second loans will have below market interest rates, and in some cases might not require payments until you sell your home.  As an alternative, some local housing departments offer low interest rate loans for the entire mortgage, sometimes a full point below market interest rates.

6. Many mortgage lenders, nonprofits, and even Realtors offer homebuyer education classes to prepare you for homeownership.  Classes normally run about four hours and walk you through the basics of home buying: how to apply for a loan, work with a Realtor, make an offer on a home, the escrow process, and the responsibilities of homeownership.