1. Get pre-qualified for a loan before you start looking for a property- If you need a mortgage, shop for it first. If you are not an “all cash” buyer getting a loan pre-approved is the smartest thing to do before you start shopping for a property because it will tell sellers that you are a serious
prospect, and you know in advance the maximum mortgage you can afford.

2. Credit unions, banks and mortgage bankers make home loans; mortgage brokers process them. The lenders will take an application, process the loan documents, and see the loan through to the funding stage. If you do not have great credit make sure to consult with your lender because you may be able to qualify for a loan depending on how long or what reason caused the bad credit. Once you are qualified. Start researching the inventory working hand in hand with you realtor,
and remember three key words LOCATION, LOCATION, LOCATION. The desirability and resale value of your property “TO BE” depend onlocation more than any other single factor. Remember do not let emotionget in the way of a wise investment. The value of your property will beinfluenced greatly by what surrounds it. 

3. You will need a down payment. The down payment requirements
vary depending on the type of loan.

     4. You will need funds for closing costs. These are charges for services related to the closing of your real estate transaction. They include, but not limited to: escrow fees charged by the company handling the transaction, Title policy insurance fees charged by the title insurance company, mortgage insurance fees, fire and homeowners insurance, County Recorder fees for recording your deed and loan origination fees. Consult your lender for an actual estimate of these costs, as well as information about loan programs which can assist in financing your closing cost.

      5. Are you familiarized with “Points”? Some loans have points others do not. A point is a loan origination fee equivalent to 1% of the loan amount. Together with the interest rate they constitute the yield of your loan for the lender. Some lenders charge a higher interest rate to compensate for charging no points. It is important to compare and shop lenders to make sure your loan is at a competitive yield.

6. What’s a fixed rate or an adjustable rate? The answer to this question depends on whether mortgage rates are high or a low point when you purchase, and on how long you plan to live in the property. If rates are high, an adjustable rate might be attractive since subsequent rate drops could reduce your monthly payments. Additionally, lenders may offer a below market rate during the first few years of an adjustable mortgage to make it appealing to you. If the interest rates are low you may want to take a fixed rate to protect yourself against the possibility of rising interest rates.

      7.Two main types of loan categories: Conventional Loans - these loans are available with fixed or adjustable interest rates. Some loans may require mortgage insurance. Government Loans - These include Federal Housing Administration (FHA) fixed and adjustable rate mortgage loans, and Veterans Administration (VA) fixed rate mortgage loan.

8. If you are a low or moderate income homebuyer there are special programs designed to help you: these loans are available through private lenders, as well as local and state housing agencies. Most lenders specializing in real estate mortgage loans are aware of these types of loans.

      9. You may have to pay Mortgage Insurance because it protects the lender from potential loss if you should default on your mortgage loan payment. Generally, conventional loans that require larger down payments do not require mortgage insurance. Mortgage insurance is always required on FHA mortgage loans.

     10. Many organizations offer home loan counseling to prospective homebuyers.These organizations provide classes for homebuyers to cover the steps of homeownership.