Six Simple Things to Ensure a Smooth Home Purchase

What kind of home do you want? Need?

Before you get out there and start looking at houses, it's a good idea to determine not only what you want in a house but also, more importantly, what you need. It focuses your house hunting and saves valuable time not trudging through houses you wouldn't in a million years dream of living in.

Here are some things to think about as you set your priorities:

Where do you want to live?

Do you want to live close to your family? Or as far from them as possible? Do you need schools? How important is it to you to be close to shopping? Work? Hospitals? Entertainment? Community amenities? Traffic? Looking for a house really starts with looking for a neighborhood. Deciding where you want to live will save you a lot of time as well as miles on your odometer and is key to narrowing your search for a home.

How long do you expect to live in your new home?

For instance, if you plan on living in your new home for only a few years, or if you don't have children, then proximity to schools may not be an issue, but resale value may be. On the other hand, if you plan on staying put for ten years or more and have a family, schools as well as home size will be priorities.

What don't you like about where you're currently living?

Making a list of what you definitely do not want in a home will help you weed out homes without having to waste your valuable time looking at them.

It may seem obvious, but take a good look at your lifestyle. Do you entertain a lot? Then you'll want a home that lends itself to that. Do you work from home? You'll need a home with a place to create an office. Are you a gardener? Then lot size is a priority.

Keep these things in mind as you make your list of home wants and needs. And remember, your list needs to be flexible in case you can't find a home in your price range with all the amenities you want. It's a good idea to put the list in order of importance. For instance, an eat-in kitchen may be more important to you than a fireplace.

How much home can you afford?

Few things are more frustrating than falling in love with a home only to discover that it's not in your price range. But, how do you know what you can afford? By knowing how much money you can qualify to borrow. Your New American Funding mortgage specialist will help you determine exactly how much you qualify for - and our technology allows them to do so in minutes.

Get approved before you shop

Why apply for a mortgage when you haven't even started looking for a house yet? Because when you get approved before you shop, you're in a better position to negotiate because the seller knows that you're already approved for your mortgage and that your offer is good. This gives you a powerful edge as a buyer.

Unlike other lenders' "pre-qualifications" or "pre-approvals," New American Funding will make sure your credit score, income, assets and employment have all been verified and your home loan amount has been approved*. Take a look at these great advantages:

• You know exactly how much home you can afford, eliminating the guesswork
• You're in a better position to negotiate a lower purchase price because the seller knows your offer is good
• Once the appraisal and title work's been done, you can close on a home in days not weeks - potentially saving the seller a lot of money- another bargaining chip
• You're a virtual cash buyer - it's like shopping for a home with the money in your pocket
• An approval is good for 2 months

Mortgage Basics

Simply put, a mortgage is a loan you take out to finance the purchase of your home. It's also a legal contract stating that you promise to pay back the loan on a monthly basis. Your monthly payment typically goes toward interest, taxes and insurance as well as the loans principal.

There are literally hundreds of variations of mortgages. Fortunately, there are just a few basics you need to know in order to understand most of them.

Fixed-rate mortgages have a fixed interest rate over the term of the loan. By far, most mortgages closed each year are fixed-rate mortgages. The advantage of a fixed-rate mortgage is that your monthly payment never changes. The disadvantage is that if interest rates fall below your fixed-rate and you want to lower your rate and consequently your mortgage payment, you'll have to refinance.

Adjustable-rate mortgages (ARM) start with a lower interest rate than a fixed-rate mortgage for an introductory period - typically 1, 3, or 5 years - after which the rate adjusts - usually annually - based on a pre-determined index. An ARM is a good choice if you're expecting to live in your home for less than five years and can also help you qualify for a larger loan.

The term of your mortgage is the number of years you have to pay back the loan. Most people opt for 30-year terms, but 15- and 20-year terms are available.

The down payment is the difference between how much you borrow and the purchase price of your home. And, in spite of what most people think, you don't need a big down payment to buy a home. New American Funding offers many low and even zero down payment loans. For more information on our low and zero down payment programs, call your New American Funding mortgage specialist today for more details.

*Your loan will close as long as the property gets a satisfactory title and appraisal and your financial situation remains the same.

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