First Time

Home
Buyer

Buy a New Home in

Maryland 1920
Greenspring Dr.
Timonium, MD 21093
443-943-6486
www.marylandnewhomepurc
hase.com

Gui
Boo

Table of
Content
s
Credit Scores
9 Home Affordability
10 Steps to Buying a
Home
15
Payment Help
11 Down
Loan Types
16 FAQs from Home
Buyers

Credit Scores
Credit scores are an important factor for potential home buyers.
Credit scores are used to determine both purchase loan
eligibility and interest rate. The high- er the credit score the
higher the chance for loan approval and a lower overall interest
rate.
Are you trying to make a major purchase and are in need of
improving your cred- it score to do so? Our team of licensed
Realtors and Loan Ocers have decades of experience helping
people to repair their credit with the three major credit bureaus.
Here are 13 credit repair tips that we have uncovered in our
years of as- sisting others to improve their credit scores in order
to get qualied to buy a home. These are all tried and proven
methods for getting your credit scores up.

1-Your payment history to creditors that report to the credit

bureaus account for about 35% of your given credit scores. This is the most
important part of starting to repair your credit. Make NO 30 day
late payments to those credi- tors. This will begin to have a
great impact on your credit score. If you have a bill due in a
given month make sure that payment posts before the end of
the month.

2-Seriously consider setting up auto payments to your creditors

through a checking account or debit card to assure that there
will be no future 30 day late payments.

3-Account balances account for about 30% of your given credit

scores. If you want to improve your credit score keep the
balances owed on your credit card at about 30% or lower than
your available credit limits. If you have a credit card with a
$1,000 credit limit keep the balance at $333 or lower for
example.

4-Establishing and then keeping accounts open accounts for

about 15% of your given credit scores. Keep old accounts in
good standing open. The older that your credit accounts are
the better that they are for your credit.

5-Establish different types of credit. This accounts for about

10% of your given credit scores. It is great to have revolving
accounts and these help your credit signicantly when
managed well. However, establishing installment loans along
with your revolving accounts demonstrates the ability to
manage different types of credit.

6-Do not take on more than you can reasonably manage to pay.
All you really need is 3-4 accounts reporting on your credit
that you are managing well. Ex- cessive credit too fast can
have a negative effect on your credit scores. This ac- counts
for about 10% of your given credit scores.

7-Open new trade lines. Credit cards are a great tool for
improving your credit when they are managed correctly. There
are several types of credit cards. Re- tail store credit cards,
bank credit cards, secured credit cards. Applying for and being
approved for 2 or 3 credit cards is a BIG step toward getting
your credit scores up. If you do not have the best credit and
know it, do not apply for cred- it cards designed for people with
good credit. CapOne, First Premier (secured
credit card), JC Penny are easier cards to get if you have
challenged credit. Fin- gerhut reports payments to the credit
bureaus and these accounts can help your credit too. We do
not endorse nor make any expressed guarantees that you will
be approved. But these are a good place to start if your credit
is not the best. Applying for an auto loan, being approved,
paying all payments on time, will also improve your credit
scores.

8-Being added as an authorized user on someone else's credit

card whom is managing their card correctly can also improve
your credit scores. The older the card and the higher the credit
limit the more it will improve your credit scores. By being
added as an authorized user that account would then begin
reporting on your credit report each month. Of course you
would only want to consider doing this with someone who pays
their card on time each month. If they do not then that card
would have a negative impact on your credit scores.

9-Increasing your credit card limits can also help improve your
credit scores. After six months of on time payments credit card
companies will often approve a credit limit increase. Doing this
while maintaining a low balance will have a positive effect on
your credit scores. It signals that you have available credit yet
are not in need of using it.

10-Get current on any reporting late payments and stay current.

Credit reports only report payments that are late 30 days or
more. If you have a 30+ days late report on your credit that will
continue to report until you bring it current. This will kill your
credit score. For example, if you did not make a payment in May
on your credit card or card or car payment and then make a
payment in June.
You have just made May's payment and June is still due. If you
do not make an- other payment until July then you have what's
called a running 30 day late pay- ment. This will have an even
worse affect on your credit scores.

11-Settle collection accounts and charge offs. The goal is to

have all your past due accounts marked paid, current, or
settled. When it comes to mortgage loans the extent to which
this must be done varies. Contact us for more details. Some
debts do not necessarily have to be paid off to qualify for a
mortgage loan. Settling these accounts will improve your credit
scores. Collection that are 180 days late or more usually go into
charge off status. This has a worse im- pact on your credit then
a collection does. If you have collections try and re- solve them
before they go to charge off. You can usually negotiate the debt
with the creditor and often offer a lower agreeable settlement
offer. If you settle a debt make sure to get a letter from the
creditor or collection company stating that your account has
been settled with a 0 balance. You will need that letter to get
that negative account off of your credit report. The older the
charge off is the lesser affect it has on your credit scores. Do
not attempt to settle these accounts if it will cause you to
become late on your accounts in good standing. It is critical
that you keep your current accounts paid on time.

12-Remove old delinquent accounts that have reached 7 years

since their re- porting date on credit. Old delinquent accounts
greater than 7 years old can usually be removed at your
request to the credit bureaus. Removing these will improve
your credit scores.

13- Review your credit report and work to x errors found on it.
Errors do hap- pen on credit reports. After review of your report
inaccuracies can be disputed with the 3 major credit bureaus.
Just keep in mind that the credit bureaus will personally
contact the creditors involved and nd out their side of the
story.
Disputes that are not answered within 30-45 days which
happens sometimes but not often will be removed from your
credit report. However, if the creditor sticks by the reported
debt then the credit bureau will note that on your credit and
the debt will remain. You will then have to back up your dispute
with proof that the debt is reported inaccurately. Some credit
repair companies promise
to improve your credit and what they do is simply write the
credit bureaus a dispute letter for all your negative collections
and charge offs hoping that the
creditor does not reply. However, usually they do. If you are
trying to buy a home your credit report cannot have any
unresolved disputes on it. Keep this in mind if you choose to
dispute an account have proof to back it up. If not, then any
temporary increase in your credit score will be lost when the
lender forces you to remove unresolved disputes from your
credit report.
Source:
https://www.marylandnewhomepurchase.com/13-credit-repair-t
ips.html
8

Home Affordability
Considering the major housing bust that the economy is
still attempting to recover from it is critical that home
buyers seriously consider the affordability of a home
purchase for them.
Buying a home is an exciting experience, a great
accomplishment. For many it is in fact the fulllment of
the American dream. That dream can become a
nightmare if you do not buy within your means.
As you consider purchasing a home be careful not to bite
off more of a mortgage payment than you can easily
afford. Because at the end of the day that is what you
own in the beginning a mortgage payment. The house
belongs to the bank if you do not keep up with your
payments.
You may be told by your lender that you qualify for a very
large home loan. That does not mean that you should
shop in that price range. Most Financial Advisors suggest
that you do not go over a total debt to income ratio of 43.
Your lender can tell you what your debt ratio is for any
given loan amount. Shop within a reasonable total debt to
income ration. If the 350,000 purchase price that you may
qualify for puts you over a com- fortable debt to income
ration then maybe you should be shopping for a home
below 300,000. Be practical do not fall in love with a home
that you will struggle hard to pay for. You do not know what9
emergency nan- cial situations may loom in the future.
It is also advised that you should try and have a savings

Steps to Buying a Home

1
Source: https://www.marylandnewhomepurchase.com/what-a
0
re-the-steps-to-buying-a-home-.html

Loan Types
When attempting to buy a home an individual should learn
about all available loans that there are to do so. There are
many different loan programs available to buy a home and
each has its plus and minuses. By evaluating each of
these loan programs you will be able to nd the loan
program that best ts your unique situation.

Coventional Loans: Conventional loans are a great

option for nancing a new home purchase. Conventional
loans extend up to 97% nancing op- portunities for home
buyers. There are however some banking institu- tions
and credit unions that will go 100% nancing on a
conventional loan. However, with enrollment in one of the
down payment assistance programs available it could
cover much of any necessary down payment.
Conventional 1st time home buyer loans approval
guidelines are a little more restrictive than other loan
programs. With conventional loans their is no upfront
funding fees like USDA, VA, FHA Loans. Although these upfront fess can be nanced into the home purchase they
nonetheless are being paid for by the home buyer. With
Conventional loans the monthly mortgage premium can
be avoided with a 20% down payment on a home. If you
choose conventional nancing but do not put 20% down
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there will be a mortgage insurance. However, that
mortgage insurance premium can be requested removed

Veteran Loans (VA): Veteran Administration loans are a

great option for nancing a new home purchase for
Veterans. Veteran home loans extend 1OO% nancing
opportunities for Veteran home buyers. Veterans
affairs home buyer loans are by far the one of the best
new home pur- chase program available. To qualify for a
Veterans Home Purchase Loan, you must be an active or
honorably discharged veteran of the armed forces. You
must apply for a Certicate of eligibility, which our team
can help you do. Veteran loans do have an upfront fee
which can be substan- tial. That upfront funding fee can
be avoided only if the Veteran has an service related
disability percentage of 25% or more.

Benets of a VA home loan,

includes; Low&Affordable
xed interest rates No
monthly mortgage insurance
0 down
payment.
Large loan
limits
Gift funds and grant funds
accepted Seller concessions

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FHA Loans: FHA rst time home buyer programs are a

great option for nancing a new home purchase. FHA
loans extend 96.5% nancing op- portunities for home
buyers. However, with enrollment in one of
the down payment assistance programs available it usually
covers much of the necessary down payment. FHA 1st
time home buyer loans are the easiest of all purchase
loans to qualify for. The credit score and income
requirements for FHA loans are less restrictive than any
other rst time home buyer loan program. The FHA has a
203K Loan option which is a re- hab loan that can provide
up to $30,000 in home improvements on your new home
purchase. FHA Loans have both upfront funding fees and
life- time monthly mortgage insurance.
Some of the reasons why an FHA loan in Maryland is a
great choice, in- cludes;
Low&Affordable xed
interest rates Only a 3.5%
down payment.
Large loan limits
Gift funds and grant funds
accepted
Down payment assistance
programs allowed Seller
concessions are allowed
Eligible properties include new construction, existing 13
homes, manufac- tured homes, condos that are FHA
approved, PUD's, and new manufac- tured homes

USDA Loans: USDA loans are a great option for

nancing a new home purchase. USDA loans extend
100% nancing opportunities for home buyers. USDA
Loan programs were started to encourage development
in rural areas of the USA. The USDA loan assists low to
moderate income families in achieving their
homeownership dreams. To qualify, the bor- rower must
meet USDA minimum income and credit score standards,
and purchase a home in one of the USDA eligible rural
areas in their state. USDA Loans so have an upfront
funding fee and a lifetime monthly mortgage insurance.

Some of the reasons why a USDA loan is a great

choice, includes; Lower mortgage insurance
premiums than FHA
Affordable xed interest
rates 0 down payment.
No maximum purchase
price
Gift funds and grant funds
accepted Seller concessions
are allowed
Eligible properties include new construction, existing
homes, manufac- tured homes, condos, PUD's, and new
manufactured homes
Not limited to rst time home buyers.

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Down Payment
Help

There are various down payment assistance programs for

rst time home buyers in the US. There are also some
forgivable grants for down pay- ment assistance and
closing costs for rst time home buyers in various states in
the US. One of the biggest obstacles to home-ownership
is coming up with a required down payment. Down
payment assistance programs and grants help many
achieve their home-ownership dreams that otherwise
would not. State or Local County Employees may be eligible for additional down payment assistance.
Not every rst time home buyer qualies for down
payment assistance or grants. There are statewide down
payment assistance programs and there are sometimes
county or city specic programs within states. Here is a
great resource if you are looking to apply for a down
payment assis- tance program within you state.
http://downpaymentresource.com/are- you-eligible/

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FAQ from Home

Buyers

How much money will I need to

buy a home?

The overall money that will be needed by a person to buy a home depends
upon several factors. There are basically three separate categories of costs
that a home buyer is expected to pay for in some way.

First off there is the down payment. The down payment could be up to 10% of
the purchase price. This depends upon what loan they are offered or qualify
for. VA and USDA Loans offer 100% nancing, eliminating the need for a
down payment. FHA Loans for rst time home buyers require 3.5% down.
Conventional loans usually require 10% down. However, there are many
down payment assistance programs that are available that can reduce or
eliminate the down payment cost to the home buyer.

Secondly, there is the buyer's portion of closing costs that must be paid. Title
fees, state taxes, stamps, title fees, home owner's insurance, etc. These
fees, although they are the buyers, can be covered by a negotiated closing
cost percentage agreed to by the seller. Generally up to a 6% seller's
assistance is allowed with most loan types. If enough seller's contribution is
negotiated as part of the purchase contract, generally most or all of the
buyer's portion of closing cost fees can be covered.

Lastly, there is the cost of the appraisal, optional home inspection, termite
inspection. These ser- vices if chosen or necessary, must be paid in advance
of loan settlement. If the home buyer chooses an experienced lender with
rst time home buyer programs, down payment assistance programs, they
can often buy their home with very little out of pocket costs.
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FAQ from Home

Buyers

Do I really need to use a Real Estate Agent as home

buyer?

Buyers do not have to use a Real Estate Agent of their

own to buy a home. However, here is a list of good
reasons to hire one.

1-A real estate buyer's agent represents the home buyer's interest
while the home seller's realtor is trying to get the best deal for
the seller.
2-The buyer's agent is paid from the real estate fees charged to
the home seller. Buyer's do not pay anything for the services of
their realtor.
3-A buyer's real estate agent can assist the home buyer with
nding the type home they are looking for.
4The buyer's agent will help a home buyer get a fair price on a
house, negotiating with the seller's realtor in behalf of the home
buyer.
5The buyer's realtor will prepare the necessary purchase
contract that gets pre- sented to the home seller by their
realtor.
6The buyer's realtor will set up appointments for the home buyer,
accompanying them in seeing the home's they are potentially
interested in purchasing.
7The buyer's realtor offers their experience and advice about
the home buying process to the client.

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FAQ from Home

Buyers

What is private mortgage insurance (PMI)?

Private mortgage insurance often referred to as PMI, is an insurance

policy that pro- tects the lender in the case of a borrower
defaulting on their loan. The home buyer pays the annual premium
in 12 equally divided payments added to the mortgage payment.
The lender is the beneciary of the policy.

PMI is required on all FHA and USDA Loans. At one time PMI
insurance ended on FHA loans once the borrower's loan to value
reached 80%. That policy has changed. FHA PMI remains for the
life of the loan with FHA Loans except for home buyer's that take out a 15 year loan when they buy their home. In this
case, once the loan to value reaches 78% the home buyer can
request the PMI to be removed.

USDA Loan PMI remains for the life of the loan. However, the PMI
insurance is only about 1/3 the cost of FHA and Conventional Loan
PMI. VA Loans have no PMI insur- ance requirement. Conventional
Loan PMI can be removed once the loan to value reaches 80%.

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FAQ from Home

Buyers

Should I get a home inspection?

If you are thinking about buying a home one of the decision you
will face is whether or not you should get a home inspection done
on the house you are interested in buying.
Home inspections are not actually required in order to buy a
home. Unless you are applying for a down payment assistance
program and that program requires one.
Although home inspections may not be required they are
generally suggested by realtors and lenders as a precaution
against buying a home that has serious issues that cannot be
easily seen. So although maybe not required, a home inspection
is worth the extra cost to assure you are buying a sound home.

Home inspectors will do a complete inspection of the

home, including; Plumbing
Roong
Siding
Electrical

Foundati
on
Gutters and
Downspouts
Furnace

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Want To Buy a Home? Let Our Team of

Licensed Maryland Realtors and Loan
Officers Help.
Our team here at Buy a New Home in
Maryland can help you from A-Z in
the home buying process. We have
over 20 Years of experience helping
our clients find and negotiate a price
on their dream home. We will match
you with the best available first time
home buyer program at the lowest
possible interest rates. Give us a call
at 443-943-6486. Or visit us at our
website
www.marylandnewhomepurchase.co
m

Buy a New Home in Maryland

1920 Greenspring Dr.
Timonium, MD 21093
Serving all of Maryland
443-943-6486