Easy Homebuyer’s Toolkit

By Michael Allen

In today’s Wall Street Journal, a lengthy article details the federal government’s action in taking over both Government Sponsored Enterprises (GSEs) to stabilize the US mortgage market.  Another huge benefit to the action last weekend is to calm the fears among many foreign central banks. The central banks of most major foreign powers, including China hold huge portfolios of the bonds issued by these two mortgage giants.

These foreign central banks have become increasingly uneasy recently due to the unstable conditions in the worldwide for these bonds.  To read the full article on the WSJ website, click HERE.  The takeover action had a multiple benefit.  In the US mortgage market rates dropped nearly a full quarter percentage point from 6.125% to 5.875%  In addition, the stock markets rallied with the Dow Jones Average closing up 289.78 points.

On the foreign front, the move  calmed many anxious central bankers across the globe who have been the largest buyers of US mortgage backed bonds and government bonds for many years now. It is a fact of life in today’s world that we live in a highly interconnected marketplace.

The main point however of this action was to stabilize the mortgage market and make mortgage financing available to consumers at favorable rates again.  With the recent troubles Fannie Mae and Freddie Mac have experienced, they have reduced their funding of new loans by many Billions of dollars.  This has reduced availability of mortgage financing and put a damper on many people’s plans to purchase a home this year.

Hopefully the recent takeovers will stabilize our mortgage markets and make mortgage financing more readily available to hopeful buyers.  If you have been wanting to buy a home this year, check with mortgage lenders and see what programs are available with the recent changes.  Hopefully you will find that your desires to own a home can indeed come true this year!

For complete information on how to buy a house, please take a look at our blog and at our complete course providing you all the tools you need to become a homeowner in just 7 short weeks!  www.easyhomebuyerstoolkit.com

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Buying a home is intimidating to most people simply because it’s a complex process we seldom do. So let’s boil it down to bite-sized chunks. It’s actually a straightforward sequence anyone can master to quickly reach their dream of home ownership.

1.Where NOT to start: Don’t commit to a Realtor® right away.  Most people, are stretching to have enough cash to close.  Using a “Buyers Agent” will cost you 2%-3% more for the house and could keep you from affording one. So where should you start?

2. Where TO start: If possible, go look at new homes.  Make no commitments, just look and ask lots of questions.  DO NOT agree to use their mortgage company.  Look at existing homes too.  Call ONLY the listing agent for each house.  DON’T ever discuss it with any other agent no matter how much they try to get you to.

Tell the listing agent you are not using a buyer’s agent and if you make an offer, you would reduce the offer price by 3% to compensate. They should be agreeable. If not, consider another house. DON’T let this agent show you other houses; they then become your buyer’s agent!

FACT: They will all tell you the seller pays their commission so it does not cost you.  Baloney!  EVERYTHING the seller “pays” is built in to your final price! Sellers want a net after sales costs.  If commission cost is 3% less, they can take a 3% lower price from you and net the same. Simple! AND the listing agent & your mortgage company will still handle the contract stuff.

3. How much can I afford? If you buy a new home use the builder’s mortgage company.  Saves you money & time.  They will “pre-qualify” you & tell you how much you can spend. If not, get a local mortgage company.  Preferably local branch of a national company.

If you are talking to several new home builders, qualify yourself first:  Add all your monthly debt payments up, minimums only. Go to Realtor.com, Bankrate.com & search for mortgage calculators.  Plug in your numbers to get the answer.

Best: On Realtor.com look up a local home listing & use the on-page calculator.  Listing Realtor® should have put tax & insurance estimates for that house in the calculator for you.  You need these to get the total number.

4. Find your dream house: Search!  Realtor.com, search engines, newspapers & their website’s, drive likely areas looking for FACT: signs.  Do all the above.  Cross match results. When you find prospects online, drive area and look for others.  I found several this way & helped a client buy one!  Do same even if using a buyer’s agent for same reasons. Otherwise, you could miss the perfect one.

5. How to make the best deal? Put in the contract for seller to pay all closing costs that are negotiable and 3% or 6% towards your total closing expenses.(check with mortgage co. for their max %) Get “down payment assistance” program to help. Ask the mortgage company for it. This cuts your cash needed to tiny amount.

6.Inspect: Get an inspector who reports to you only!  Go with him.  Ask questions.  You will learn a lot!

7.  Close! Ask your loan officer & the Realtor® to go with you.  Check numbers on closing statement.  If OK, sign the papers.  They are non-negotiable anyway.

This allows 2-3 weeks to find a house & work out the contract and 3-4 weeks to get the mortgage processed and ready to close.  7 weeks to your dream home!  Woo-Hoo!

Get your FREE 5-part mini course showing how you can own a home in just 7 short weeks:  http://easyhomebuyerstoolkit.com/welcome.html Written by Michael Allen, THE authority on how to buy a house.

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Just set up Twitterfeed to automatically send our blog posts to our Twitter account.  This is a test to verify it works!

Please leave any comments on your experiences with Twitter here for all to see too!

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Although most of the press you see today about the housing market is talking about the “doom & gloom”, you need to know that anytime a market like housing is “down” for one person, that spells Opportunity (yes, with a capital “O”)! Many markets are somewhat softer but still healthy enough that there is no long term risk to buying. In fact, that softness in prices creates tremendous opportunities for buyers to pick up a home they might not have afforded otherwise a year or three ago…

The article today on MSN.com talks about some of the better markets and gives one of the more balanced viewpoints on the US housing market that I have read in several months.

Check out the article HERE:

Enjoy!

Michael

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By Michael Allen

Worried about buying a home with all the talk about problems in the housing markets today? Well, in most cases, those problems create opportunities for buyers and give you a chance to possibly get the very best deal in many years. For more information, check out the article on MSN.com today HERE

The article goes into detail and has links to other resources too, so I can recommend it to you to further your education on how to buy that home you have been wanting.

Enjoy!

Michael

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