Mortgage Financing has had an abundance of change throughout the years and 2007 was no exception.  In fact, 2007 has been defined by changes across the board.  The changes have often happened daily, without warning, and have been implemented at a bat of an eye.  Intelligent & experienced reactions by Mortgage Professionals sometimes can't even keep up with them.  But rather than address these changes, I want to give the Public some very simple things to help them get into & live a comfortable Homeowner's existence....no matter what is going on around them.  This post will concentrate on those looking to buy a home for the first time.

For Renters who want to Buy A Home

• Pay your rent by check (you'll need 12 consecutive months of on-time rent payments), it's that simple.  Pay it on time, by check, and keep copies for your records of the cancelled checks.  This demonstrates a documentable housing history which does wonders for your strength as a borrower in the lender's eyes.  Forget Money Orders & Cash, pay by check.
• I can't even count the number of times interviewing someone looking to buy a home and the conversation turns to the price range of home they are looking to buy.  I then ask, "Were you looking to put any money down?"  A lot of times I get, "Yeah, I have about $3000.00 to put down."  Well, let me tell you, outside of a FHA Loan or 100% financing Home Loan, down payments typically are in 5% intervals.  Meaning, you are putting down 5%, or 10%, or 15% and so on.  So, if you are looking to buy a $200,000 home and only have $3000.00, you need 100% financing and that $3000.00 probably won't even cover closing costs, even with seller's assist. 
• Speaking of interviews, don't be afraid to interview the Mortgage Professional that you may be working with.  While they will inundate you with numerous questions to get a barometer of your financial & credit situation, don't be afraid to interview them to make sure that is the Professional you want to be working with.  Question their level of experience, loan products available, their personal availability to you, and other professionals they could refer to you that may help in the home buying process.  It's not a bad idea to get references.  Do your homework, become a sponge. 
• When you get that Pre-Approval Letter, it will probably say that you are qualified to buy a home up to X amount of dollars.  Bear in mind, just because in the Lender's eyes, on paper, you qualify for that much home....it doesn't mean you will be comfortable with that payment in the reality of your life.  When qualifying potential homeowners, somewhat inevitable expenses such as utilities, cell-phones (I can't believe that I'm saying this is a somewhat inevitable expense:-), groceries, gas, etc...aren't taken into the equation.  So, make sure you are comfortable with the payment and be sure to take into account other daily expenses that you incur.  While buying a home is a promising step into a more financially free capacity for you and your family, there's no sense in being Mortgage Poor.
• Whatever Loan Program is best for you, it is vital....let me repeat that....VITAL, that when you close on your home, you have money in the bank.  We call it Reserves; you can call it 'Cash for a Rainy Day.'  After-all, homeownership carries responsibilities and if something goes wrong with the home, you want to make sure you have the cash to take care of the problem.
• Get the proper documentation together BEFORE speaking with a Mortgage Professional.  This typically entails 2 most recent pay-stubs from all borrowers, last 2 years W-2's, last 2 months bank statements (all pages), most recent statement from any other asset account (401K, Stocks, Mutual Funds, CD's, Retirement, etc), 12 months cancelled rent checks, and at the point of application your Mortgage Professional will let you know what else may be needed to start the process.

• Have a good idea of what your credit looks like before you speak with a Mortgage Professional.  This site is a pretty useful tool in helping you understand what credit is all about and will help you get a copy of your own Credit Report.  If you have had credit issues in the past, be prepared to address what life occurrences (job loss, medical issues, etc) led to your credit becoming less than perfect.
• When looking for a Mortgage Professional, I recommend doing a few things.  Ask friends & family members if they have any recommendations of somebody they used in the past; this helps break down the trust barrier right away.  Also, speak with your respective bank or credit union.  While Mortgages aren't their forte these days, sometimes they can be a nice option for certain borrowers.  Finally, do your own independent research.  Look on the Internet, Phone Book, and any other resources you deem important in coming across a Trusted & Competent Mortgage Professional.

This is just a rather simplistic overview of important things you should know and do before buying a home.  I'd like to invite any other Mortgage Professionals here on Active-Rain to feel free to add in their 2 pennies in a comment below of things you feel important for consumers to know.  Happy Belated Holidays to anybody reading, let 2008 be the year you Buy A Home!

Jason Sardi

First Choice Equity Group Inc.

Mortgage Consultant

610-439-2166 ext. 229

jsardi@fcegi.com