First Time Home Buyer Loans in Chicago, Illinois: FHA, VA and Conventional
Posted by madisonmortgage on February 21st, 2010
We believe that the most important first step for buying a Chicago area home is finding a loan officer and buyer’s agent that will help you:
IDENTIFY THE AREA IN WHICH TO BUY A HOME
As a home buyer, you will be better served by your agent if the agents helps you to understand the real estate market in the area and price range of your search. Many home buyers would like to live in a particular geographic area. However, if their income level doesn’t permit them to obtain financing for the price range in that geographic area, the buyers will be losing valuable time and good homes may be selling where they would be qualified to buy. Prices escalate monthly. Once a home buyer makes the decision to buy their first home (First Time Home Buyer Programs) or move up from their existing home, they need to work with an experienced real estate agent who knows the market and is willing to:
(1) make sure you are qualified for a specific price range, and
(2) show them homes in their price range in areas that are the most convenient and reflect the home buyers’ choice of style, size, etc., for their price range.
GET PRE-QUALIFIED
Once the you, the buyer(s), have toured homes and focused on an area, you’ll need to be prepared to write a contract or offer for their home of choice. For this, most listing agents and sellers will want to see that the buyer is CREDIT APPROVED. Credit Approval requires that a lender review the buyer’s credit report and provide the buyer and their agent with a LENDER’S LETTER stating that the buyer is qualified for the price range. In very competitive real estate markets such as the Chicago, Carol Stream and Wheaton area, many buyers will be more competitive if they provide a PRE-APPROVAL COMMITMENT. This letter will state that the lender has reviewed the credit report, employment verification, cash to close and other requirements to buy in that price range. The only thing needed is a Contract of Sale and an Appraisal. As a Pre-Approved buyer, you’ll be a VERY competitive home buyer. Read more on the Pre-Qualification process on our site.
DON’T INCUR ANY NEW CREDIT
Once you have a Contract of Sale, you need to be very careful that your credit profile remains as it was when the lender pre-qualified or pre-approved you for the mortgage loan. If you qualify for a loan today, you may not if you make large purchases such as a new automobile or major furniture purchases. These items can wait until after you have settled on your home purchase. Every year, home buyers will lose their ability to buy a home because a credit review by the lender shortly before settlement which shows major credit purchases. Read our article on What Not to do After you Apply for a Mortgage
UNDERSTAND YOUR HOME INSPECTION
If you are buying a resale or previously occupied home, you will probably have a home inspection performed to make sure that the mechanical systems are operating properly, electrical systems work properly and are safe, plumbing systems operate properly and that the structure, roof and exterior of the home is sound. Home inspections are valuable processes to discover known (undisclosed) defects or unknown defects. What Home Inspections are NOT is a process to try to renegotiate the price of the house or to have the seller make cosmetic upgrades. WHAT YOU SAW WHEN YOU TOURED THE HOME IS WHAT YOU’LL GET. Home inspections are designed to discover mechanical/electrical/plumbing and structural defects. Your agent will be better able to get important and necessary repairs made by the seller if the home inspection doesn’t get side-tracked to cosmetic matters. If the appliances are old?? They were old when the home contract was written. Old appliances will affect the price of the home but they are not a matter for home inspections as long as the appliances operate properly.
TERMITES IN YOUR AREA?
If you are planning to buy a home in an area that has a normal population of termite colonies (most of Illinois falls into this category), by all means, have a termite inspection of the property before settlement. Many areas of the US have contracts with a termite paragraph that provides for the buyer or seller to have a licensed termite inspector visit the property, inspect for wood destroying insects. The contract will also determine who pays for treatment or any repairs needed. Government loans (FHA, VA and Rural Housing) require termite inspections and treatments and or repairs if an infestation is discovered.
WALK-THROUGH THE HOME BEFORE SETTLEMENT
Most contracts provide for a “Walk-Through Inspection” of a home within a few days of settlement. You, with your agent, should be able to walk through the property and test the appliances, systems, etc. to make sure that everything is in substantially the same condition as when you negotiated the Contract of Sale. Some things to look for are:
Did the movers damage the floors or walls during the furniture move-out?
Are the appliances and mechanicals still in working order?
Did the seller remove all trash and debris from the premises?
Do the locks and door knobs work?
If there is damage to the home following the Home Inspection, you’ll want to negotiate a cash compensation prior to settlement.
EVERYTHING FINE? On to settlement. View our Pre-Closing and At Closing pages of our site.
Please feel free to call us to discuss your mortgage options. We would be happy to answer your questions.
Your local Wisconsin, Illinois, Minnesota and Florida Mortgage Bankers:
Dennis Hardy : Brian Collins : Kelly Rydzik : Joy Lynch
Toll Free: (877) 240-5810
questions@madisonmortgageguys.com
www.MadisonMortgageguys.com
Visit our main blog at http://www.madisonmortgageguys.com/blog/
Other Chicago first time home buyer programs blog posts:
FHA first time home buyer programs Chicago mortgage loans
