Consumer News
Owning a Piece of the American Dream
By
Nov 18, 2007, 21:02

(ARA) - For many, the American Dream begins with owning a home. Having a place of your own to call home can be your most prized possession and the cornerstone of your wealth. With the inventory of available homes increasing, and in many areas, prices stabilizing, now might be the time to consider buying a home.

GMAC Mortgage and GMAC Real Estate offer the following five steps to owning a home.

* Prepare for Success -- Owning a home comes with serious responsibilities that go far beyond making a mortgage payment. Likewise, it comes with many rewards as well. Many Americans have used homeownership as the foundation of a lifetime of wealth building.

Before you buy your first home, make sure you are prepared for success. Have financial reserves in place for unforeseen repairs and be prepared to put the time and effort into maintaining your home.

* Get Pre-approved -- Before you begin the home buying process, work with a mortgage lender and loan officer who can help you understand exactly how much you can reasonably and responsibly afford.

“By getting pre-approved, you will receive a conditional loan commitment for up to a certain amount from your lender before you have found a home, based on a review of your credit and finances,” says Jim Ferriter, executive vice president for GMAC Mortgage. “Pre-approval makes your home search more efficient by allowing you to focus only on the homes you know are in your price range.”

Keep in mind that long before you get to the point of pre-approval, you are already affecting the amount you could be loaned as a result of your credit history. Even if you are not going to buy a home for a while, make sure you pay all of your current bills on time and do your best to develop a solid credit history.

* Hunt for a Home -- Once you know your price range, find a real estate agent you trust, who can work with you to find a perfect home. Naturally, shopping for your home is fun, but it can also be a long process, depending on the state of the housing market in your area. Having patience is key. Make it easier by doing your homework -- try to look at a wide variety of homes and be sure to consider the neighborhood, the schools, how much room you need both now and in the future, and how different types of homes will suit your lifestyle. Take a notebook and jot down a few notes about the homes you visit, as you will most likely look at several and might not be able to easily recall the special features of each home.

* Make an Offer -- Once you’ve found a home that you want to buy, you’ll need to decide how much you’re willing to pay to make it yours. Your real estate agent will work with you to come up with an offer based on recent sales in the neighborhood, the overall market conditions in your area, and the current condition of the house. Once you make an offer, your real estate agent will present it to the seller or seller's agent. At that point, the seller will either accept, reject or counter your offer with changes in some of the terms. You may either sign or counter the offer. When both parties agree to the terms, you will then sign a purchase agreement, which becomes a valid contract.

* Finalize Your Financing -- Once you’ve selected your new home, update your pre-approval application with complete property information and secure your home loan.

“You will need to confirm your choice of loan programs and should consider how long you plan to stay in your home to help determine the right loan for you,” continues Ferriter. “Your mortgage lender and loan officer can work with you to show you the options that are available.”

* Get a Home Inspection -- Since buying a home is going to be one of the largest investments you will ever make, have the home inspected before making the purchase. Choose a qualified inspector who can thoroughly evaluate the condition of the potential new home. The inspector should evaluate all exterior and interior structural components of the home and all major systems, including heating, cooling, plumbing and electrical.

* Closing -- Once you’ve found your home, agreed on a price with the seller and had the home inspected, the closing marks the end of the process and you will officially take ownership of the property. Remember to take into consideration that you will have closing costs to pay, which range from lender and appraisal fees to third-party fees to prepaid items that must be paid to your lender in advance.

The process does not end once you’ve settled into your home. Now that you are a homeowner, here are a couple more things to keep in mind:

* Maintain Your Home -- Whether you plan on staying in your new house for five years or 30 years, you should always keep resale in mind. Keep your home in good shape. Also, once you’ve built up equity in your home, consider using that equity to make renovations that can add value to your home. Remodelled kitchens or bathrooms usually offer the best bet for a solid return on your renovation investment.

* Refinance -- You don’t have to stick with the financing option that you used when you first bought your home. Lenders are aware that your financial situation may change over the life of your mortgage, and refinancing with a new interest rate or loan term can be a great way to save money on your mortgage in both the short and long term.

If you think homeownership is for you, now might be the time to make your move. For more information on the process, visit www.gmacmortgage.com or call GMAC Mortgage at (800) 888-GMAC (4622) or visit www.gmacrealestate.com.

© Copyright by EveningsNews.com