Renting vs. Buying
Costs of Home Buying
Tips for the First-Time Homebuyer
Credit Basics
Choosing The Right Loan Program
The Loan Application Process
Documents You Will Need

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Renting vs. Buying 

Renting:

Advantages	Disadvantages
Usually costs less than buying	No tax benefit
You can usually relocate more easily	No investment in or from property
Little responsibility for maintenance	No equity is accumulated
No responsibility for repairs	Rent amount may increase frequently

Buying:

Advantages	Disadvantages
Tax benefits	Responsible for property taxes
Greater stability	Responsible for maintenance and repairs
One of the best investments in today’s economy	Monthly housing may cost more
Your equity builds	Cash is tied up
First home often leads to a better home	Can’t always sell a home quickly
Pride of ownership and fulfills the American dream	Less mobility

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Costs of Home Buying

How Much Money Do You Need? Enough to cover:

1. Down payment
2. Closing costs
3. Other housing related costs: mortgage payments, maintenance, repairs, private mortgage insurance

When it comes to down payment and closing costs, you may have several options – including little or no money down loan programs. Furthermore, some loan programs do not require private mortgage insurance. Consult your Loan Officer for details.

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Tips for the First-Time Homebuyer

Educate Yourself
Become familiar with the home buying process. You can do this fairly inexpensively by picking up easily understandable books such as Home Buying For Dummies. Also look for local free first-time homebuyer seminars in your area.

Save for the Down Payment and Closing Costs
Keep in mind that while minimum down payments start around 3% to 5%, the greater your down payment, the more favorable your terms. If you can purchase a home with at least 20% down, you won't need to buy private mortgage insurance (PMI). Also remember that closing costs typically range from 3% to 6% of the purchase price.

Determine How Much You Can Afford
Consider your other expenses, and make sure you are saving enough toward retirement and other goals when deciding how much to spend each month on mortgage payments.

Consider Other Home Ownership Expenses
When considering how much you can afford to pay each month, in addition to mortgage payments, factor in costs such as homeowner's insurance, property taxes, private mortgage insurance (if required), utilities, repairs, and maintenance.Get Pre Approved for a Loan

You’ve made some estimates, but pre-approval will give you a more accurate picture of how much credit a lender is willing to extend to you. Knowing how much you can afford will help you and your Realtor spend your time more valuably, shopping for homes that are truly in your price range. Additionally, when it’s time to make an offer, pre-approval sends a message to the seller that you are serious and prepared to buy.

Location, Location, Location
Determine what neighborhood features and characteristics are most important to you and then research areas that meet your criteria. Consider factors such as safety, schools, convenience, community, and resale value.Hire a Real Estate Agent

Get referrals from friends, relatives, and co-workers, and then interview several agents. Choose a Realtor® who specializes in the neighborhood you’re interested in. Rely on your Agent for advice but don’t let your Agent make decisions for you.

An agent's job is to know how much properties are worth, facilitate the sale process, and bring your offer to the seller's agent. Unless you have chosen a buyer's agent compensated directly by you, the agents on both sides of the sale work for and are compensated by the seller. They earn a commission based on a percentage of the sale price. The more you pay, the more money they get. Consider what they say within that context.

Inspection
Hire a professional Home Inspector. Get referrals from friends, relatives, and co-workers. Consult the Better Business Bureau as well. Be cautious about recommendations from your Real Estate Agent, as it is in the agent's interest that the Inspector not detect problems that could prevent the sale. Full Survey

A land survey may not uncover a disputed property line. And title insurance doesn't cover boundary line conflicts. A complete survey could save you lots of time, money, and frustration later on.

Closing Preparation
Get a closing costs estimate from your Loan Officer. Make sure you’ll have enough money for closing costs and down payment.

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Choosing the Right Loan Program

With the wide variety of financing options available today, how do you know which loan program is the right one for you?  Your professional Loan Officer and Tax Advisor can guide you in selecting a loan that will help you achieve your financial goals. However, answering a few basic questions may provide you with some insight into which loan programs are suited towards your needs.

How Long Do You Intend to Occupy or Own The Property?

Length of Stay In Property	Loan Programs to Consider
1-3 Years	1 or 3-Year Adjustable Rate Mortgage
4-6 Years	5 or 7-Year ARM; 5 or 7-Year Balloon
7 Years	10 Year ARM; 15, 20, or 30-Year Fixed Rate Mortgage

Would You Prefer a Lower Payment or More Rapid Accumulation of Equity?

Financial Goal	Loan Programs to Consider
Equity Buildup	15 or 20-Year Fixed
Minimize Payment	1, 3, 5 or 7-Year ARM; 30-Year Fixed

What Do You Feel Interest Rates Will Do in the Future?

I Believe Interest Rates Will:	Loan Programs to Consider
Rise	30, 20, or 15-Year Fixed; 7 or 10-Year ARM; 7-Year Balloon
Fall	1-Year ARM
Stay the Same	1, 3, 5 or 7-Year ARM

How Well Do You Tolerate Risk?

Risk Tolerance	Loan Programs to Consider
Uncomfortable With Vulnerability to Interest Rate Fluctuations	15 or 30-Year Fixed; 10-Year ARM
Comfortable with Market Changes	1, 3, 5 or 7-Year ARM; 5 or 7-Year Balloon