One of the most important things to remember is that being a first time homebuyer does not mean you have to settle for just any home or any mortgage. Just as with someone who has owned many homes, you have rights. While you might look for the ideal home first, we recommend you work closely with a lender to become pre-approved, not prequalified. The difference is that by becoming pre-approved, you actually go through the financial aspect of securing funds whereby a loan is approved so all you have to do is find the home and make an offer. Being prequalified simply means at first glance, it appears you would have no trouble securing a loan.

A good lender would be able to provide you with some excellent options for a first time mortgage, guiding you through the process. A great example is that as a first time homebuyer, you may qualify for a number of governmental programs that offer extremely low interest rates, along with a low down payment. The benefit here is getting into your first home with less money than previous owners would.

For some reason, many first time buyers are fearful they will have trouble securing a loan but in fact, these loans are in abundance and easy to find. Again, a reputable lender or mortgage broker can provide you with numerous options. Typically, your credit score would be pulled from the three credit reporting agencies and your employment history verified. With this, the lender will have a much better idea of the specific first time mortgage that would suit your needs.

One of the most popular choices for a first time mortgage is the one with a low down payment requirement. Again, several different programs fall within this category, some allowing as little as 3% down. Additionally, if you have any type of retirement fund, you would be allowed to make a one-time withdrawal up to $10,000. The key in choosing the right first time mortgage is to trust your lender.

Another great option for a first time mortgage is a loan that offers flexibility. For example, you want a program that fit your monthly income so you are not overstretched. Many of these mortgages are also designed to boost your credit, even if you have good credit, these programs can make it better. Finally, consider loans long-term. In this case, the type of mortgage you ultimately choose might be different if you plan staying in the home five years versus 15 years.

There are key changes that can be made in order to increase your home�s value without emptying your bank account. Many upgrades and modifications are not expensive and can provide a significant return on your investment upon the sale of your home.


Curb Appeal
The best way to add value to your home is by attracting potential buyers from the minute they drive by or pull up to view the home. If a buyer sees junk outside, an overgrown lawn, messy flowerbeds and an uninviting appearance, then you may have just caused a prospective buyer to walk away before even seeing the inside of your home. A small investment in both time and money will significantly increase your home�s curb appeal.

Spend a weekend outside, pulling weeds, filling in bare spots with grass seed and adding a few new flowers to give your gardens some fresh color. Pick up all trash, leaves and debris, including left out children�s toys, giving your yard a cleaned up look.

Consider enhancing your front door with a new coat of paint or plant flowerboxes underneath windows to create an appealing effect. Keep it simple to keep your costs and time commitment down. You will be surprised at how easily a can of paint can spruce up your front door and the overall appearance of your home.


Kitchen and Bathrooms
The two most important rooms in any home are the kitchen and bathrooms. If you want to increase the value of your home and your budget is limited, your main areas of focus should be your bathrooms and kitchen. Upgraded kitchens and bathrooms will always increase your home�s value and will keep your home looking fresh and modern.

If you are upgrading rooms for resale, use neutral tones to avoid making your home too unique. Prospective buyers want to picture living in your home, not see how eclectic your choices may be. Replace old, broken down appliances with new ones, even if they aren�t the top of the line stainless steel, this will make a difference.

With bathrooms, you can make a few changes that will pay off. For instance, a common problem seen in many bathrooms has to do with a lack of space. Make the room appear larger by painting with light colors and changing out large light fixtures for smaller ones. If you have a large vanity, consider switching the vanity to a smaller pedestal sink.


Staging
You can add value to your home simply by having your home staged. Staging is the process of removing personal clutter from a home and making the home neutral. Each room will be designed to appear clean and ready for move in day. Prospective buyers will not be distracted from all of your personal belongings and will be more likely to purchase a home that is ready to move in.

When selling your home, remember that you need to keep it clean, keep the yard free from debris and fix all small repairs as necessary. There is no reason that you should not be able to sell your home for a reasonable price as long as you follow the above tips as you prepare to place your home on the market.

Article written by: Melissa A. Nykorchuk

The reason personal mortgage insurance exists is to protect the lender in case the borrower defaults on the loan. When a buyer does not have 20% of the purchase price to put down on a piece of property, private mortgage insurance may be required by the lender in order for the mortgage to be secured.

It is vital to remember that you only need to have private mortgage insurance while you own less than 20% of your home. Once your equity has been built up, either through extra payments or property appreciation, you can have your PMI cancelled. If you cancel your PMI and continue to make the same payments, your principal balance on the mortgage will decrease at a faster rate.

With the advent of private mortgage insurance, more people are able to buy a home that is of higher quality than they would if they needed to come up with a 20% down payment. With the assurance provided by PMI, lenders are willing to accept down payments as low as 3% for a borrower to purchase a piece of property. On a $200,000 home, this calculates into a buyer needing $34,000 less in order to secure a mortgage, a great advantage to buyers who can afford a mortgage but haven't been able to save significantly for a down payment.

Private mortgage insurance will make your monthly payments higher, but you will know what your payments will be before you decide to go with a loan that requires this insurance. Remember that you will have to pay this amount until you own 20% of your home. This may take a few years, especially if real estate values are declining. Although PMI provides protection for the lender in case the buyer defaults, there is no protection provided to the buyer.

There are other types of loans available if you want to avoid paying for PMI. You can secure a first mortgage for 80% of your purchase price and then a second mortgage for 20% of the purchase price. The second mortgage will very likely be at a rate significantly higher than the first mortgage. You are encouraged to pay as much extra as possible on your second mortgage in order to reduce your interest payments over the long term. When you get close to paying off your second mortgage, you will know that you own at least 20% of your home.

Regardless of the type of loan you choose, you will have to pay for your new home purchase, plain and simple. PMI protects lenders from losing money and allows you to obtain a mortgage without coming up with a significant down payment. PMI appears to be a beneficial addition to real estate lending options for both the buyer and lender. Always know what you can afford each month and you will be able to meet your payments and live in the home of your dreams.

The #1 Mistake First Time Home Buyers Make
The number one mistake first time home buyers make is that they have no idea how much house they can afford. Before ever deciding to buy a house, all monthly expenses (excluding rent) should be tracked for 3-4 months. Expenses tracked should include coffee purchased on the way to work, lunches and dinners out, movies and other entertainment, and even pizza delivered.

After all expenses are averaged for the period, subtract that amount from net salary. Whatever is left gives a ballpark figure of the monthly house payment (including mortgage, homeowner's insurance and real estate taxes) you can comfortably make. Now you're ready to be pre-qualified by a lender.
The #2 Mistake First Time Home Buyers Make
The number two mistake first time home buyers make is that they don't interview multiple lenders. All too often first time home buyers end up using a realtor-selected lender. While there is nothing inherently wrong with that, borrowers are usually better served by shopping around for the lender who offers the most options, and can look after their interest, rather than "making it work" so they can buy the home the Realtor wants to sell them.
The #3 Mistake First Time Home Buyers Make
The number three mistake first time home buyers make is that they call a realtor to show them homes before they ever do any research on their own. First time home buyers can do a lot of research on their own by visiting open houses and touring new home communities as well as reading the newspaper and real estate magazines to find out housing prices in the areas they are interested in.

By the time they are ready to call a Realtor, they already have a general idea of the neighborhoods they want to buy in, the features they desire and the home price range they can comfortably afford.
The #4 Mistake First Time Home Buyers Make
The number four mistake first time home buyers make is that when they buy a new construction home, they agree to upgrades and added features that the builder will furnish. This is a very expensive way to buy a dining room chandelier or upgraded light fixtures, landscaping or more expensive carpeting. These items not only increase the monthly payment the home buyer will make, there is 30 years of interest added to the cost of house fixtures and features! Much of the work and additional features can be purchased at local home improvement stores and done by the homeowner. For that matter, the home buyer would be far better served to have an independent contractor do the work for them after they move in.
The #5 Mistake First Time Home Buyers Make
The number five mistake first time home buyers make is that they purchase the most expensive home they can possibly afford. First time home buyers so often look for the biggest, most expensive home they can afford a mortgage for. The problem with this home buying method is that little or no disposable income is left to purchase furniture and accessories for the house. A great big house is nice, but it will look pretty silly with no furniture or curtains.

The number six mistake first time home buyers make is that after they have maxed themselves out on a house payment, they charge up credit cards to buy furniture and other items for their home.