My First Home - Page 4 of 6

My First Home

to check the condition of a home and how to approach lenders for financing.

Dunagan recommends Fannie Mae’s Website as a home buying resource. It contains free information on everything from surviving the mortgage process to repairing your credit. He says many of his clients have gained much-needed insight into the home buying process from the site.

Check your credit. Fears says the next step is to obtain your credit profile. “ is a good resource for getting your credit score and finding out if you have anything — like a lien — that could have a negative effect on your credit,” she explains. She also recommends not having a debt-to-income ratio higher than 41%.

Find the right lender for you. Search for a mortgage broker or banking institution that will offer the best interest rate and loan terms for your specific financial situation. The goal is to make lenders compete for your business. If you can get prequalified for a loan before you find a property, it will help you discover how much home you can really afford.

Choose a real estate agent. Interview several real estate agents to find one you’re comfortable with. But, Fears says you should never sign a contract with a real estate agent because it might result in you owing them money, even if you don’t buy from them.

Obtain an inspector and a real estate attorney. Once you’ve found an agent, he or she will usually refer you to home inspectors and real estate attorneys. “You can go online to look for an attorney as well,” says Fears. “However, states differ on whether an attorney is needed. In New York, the buyer and seller both have an attorney. In Georgia, an attorney is only needed to represent the lender. In California, a title or escrow company handles the transaction. It’s a good idea to [do your] research because an informed consumer gets the best deal.”

When homeowner Earl Majette bought his first home in 1999, he educated himself on the process, and got preapproved for a loan, but he was still dissatisfied with the type of home his money could buy. “I got preapproved but I went all over the county looking for a house. I knew I wanted to be in Bergen County, [New Jersey,] near my family in New York but I couldn’t find anything I liked in the [price] range the bank gave me,” he recalls. He went back to the bank, explained his dilemma, and got surprising results: “I was able to get approved for more money! As a bank vice president, I made a pretty good income. The first time I was given preapproval, my bonus was not considered part of my salary. When I returned, I asked them to include my bonus and they did.”

Majette purchased a two-family home in Palisades Park, New Jersey, with a paying tenant already in the second unit of the home. Five years later, his property value has risen to $450,000 from $240,000. Majette has no immediate plans to