Homeowners are losing their homes to foreclosures nationwide. Where did we go wrong? For many homeowners' the American dream of home ownership has turned into a nightmare. It is a buyer's market today and a good time to own a home; however what can you as a consumer do to avoid your dream turning into a nightmare? EDUCATE YOURSELF and be sensible about what you can afford. STAY AWAY FROM what I call 'creative loan programs?. Stick to 30-years-fixed-rate, if for any reason you want to stretch, Fannie Mae has a 40-years-fixed-rate program or even a 40-years-fixed with 10 years interest only; yes your payment will go up a little after 10 years as the loan would amortize over the next 30 years, however, your rate is fixed for the full term of the loan. The down side to this program is that you will build equity only if the property appreciates; but you would still be getting the tax benefits of home ownership. So consider this:

The best gift you can give to your family is a home that you own. Historically it is the best investment over the years. The idea of purchasing a home is bound to bring many questions to mind. This is a natural reaction, as it is one of the biggest decisions you will ever make in your life. Most first time home buyers make this decision emotionally and go about it the wrong way, they start looking for a house themselves or with the help of a realtor. Once the house is found, they approach a mortgage company or a bank for a loan and try to find a way to make the loan affordable and usually end up with some creative financing program which ends up costing thousands of dollars overall during the period of loan. What's worst is in 2 to 5 years when the rates adjust, the payments go up in some cases 50% to as high as 300% and that in most cases makes the home unaffordable for the homeowner and ends up in a foreclosure.

If you are currently renting and considering purchasing a home, I recommend the very first step should be a comparison of rent versus own, to see if it makes sense for you to purchase a home or keep on renting. Most mortgage professionals have computerized programs available or you can go to www.7secretstobuyhome.com and use cool calculators to do it yourself. It is important that the information you put in is accurate, use 3-5% for annual appreciation, do not forget to put at least 0.5-1% of the purchase price for annual maintenance of the property and an additional 1% for the real estate taxes, insurance and HOA. If the results recommend in favor of purchasing a house, find a professional mortgage company who specializes in FTHB, ask for their testimonials and references before you waste your time. Look for a company that will not charge you for a credit check or an application fee.

Once you have decided on the mortgage professional you want to work with, take your tax returns, pay stubs, bank statements and 401K if applicable to the first session. This meeting is to re-affirm that based on all the financial information it makes sense for you to buy a house. Remember at this time you are not making an application for a loan or running your credit, this meeting is just to make sure you are making the right decision and with average rates approximately how much house you should be considering. If you feel pressured by the person to get an application or run your credit even at no cost, you have the wrong person. Every time your credit is run it affects your FICO score which in turn could affect the overall cost of your loan. If you are aware of any credit issues, this is the time to ask the mortgage professional you are dealing with about their past experience and the results of their previous clients who were in similar situations; make sure that this service is provided to you at no cost. Please do not fall into the trap of paying hundreds to get your credit repaired.

Remember, your mortgage professional is not an expert on tax savings, so the next appointment should be with a CPA, if you do not have one, look for one who will offer a free 30 minute consultation. This step is important to ensure you are really getting the tax savings you have used to budget your mortgage payments.

Now that you have a fairly good idea as to what you will qualify for and can afford, it is time for you to make a loan application and get the final numbers based on your credit and other factors and get pre-approved.

Seeking complete pre-approval for financing prior to making an offer on a property is a sound strategy that can help you get the best deal possible, especially if you plan to make minimal or no down payment. The seller is often leery of the reliability of a buyer with little or no down payment. This can cause the buyer to lose a significant amount of negotiating ability, by being perceived as a weak rather than a strong buyer. This is why it is very important to get a full loan approval in advance and provide a written confirmation of the loan approval when the offer is made. This shows it is a done deal and you are perceived as a cash buyer.

Now that you have all this information it is time to decide on the property you will like to own. Make a list of what you would like to have, what you must have and what you are flexible on and can live without, where are you planning to buy and how far out of the ideal location you are willing to go to get a little more of what you want. Be realistic, you know your budget, make sure you do not over extend. If you are living in a 2 BR apartment paying $800.00 a month and have budgeted for $1,500.00 for a mortgage on a 4BR single family home, that may not happen, much depends on your local market.

Now you are ready to find a good real estate agent, the same rules apply, review the testimonials and find one who will work for you and not the seller. Being commission based compensation, the higher the price the higher the commission. In today's slow market the sellers are offering thousands in bonuses to the selling agents, is your agent pushing such properties or really looking out for your best interest? I wish you the best of luck in fulfilling your dream of becoming a home owner.

I hope with this information, you are better equipped to make the right decision. If you need to learn more, visit www.vahomesinfo.com or www.7secretsyouneedtoknow.com these sites are sponsored by us to educate the average FTHB.

If you need to discuss your particular situation or want us to handle your mortgage and help you through the process, feel free to call me at 703-440-1325 and ask for Binny.

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