Buying a Home

How to Get a Home Loan

Mortgage lenders will look at many different factors when you apply for a loan, but the most important ones are:

• Your credit score at the time of application.
• The amount of debt you're currently carrying.
• Your income, relative to the amount you want to borrow.
• The size of the down payment you can make.

The first thing you should probably do is start saving extra cash. It's also a good idea to check your credit reports and scores. Many first-time home buyers think it's the mortgage lender's job to determine their budget. Not only is this wrong -- it's downright dangerous! You can get approved for a home loan that's too big for you. It happens all the time, and it's one of the most common reasons people go into foreclosure. The only thing a lender can tell you is what they're willing to give you. They cannot tell you what you can realistically afford. That is something you must figure out for yourself, and you can do it by establishing a monthly budget.
The size of the down payment depends on the type of mortgage loan you choose, the lender's underwriting guidelines, and other factors. If you use the always-popular FHA home loan program, you could put as little as 3.5% down on the mortgage. If you use a conventional mortgage loan (one that is not backed by a government agency like the FHA), then you will probably have to make a down payment of 10% or more. Additionally, if you want to qualify for a mortgage lenders lowest interest rates, there's a good chance you have to put 20% down.
http://www.homebuyinginstitute.com/mortgageprocess_article30.php

Making the distinction between the improved portion of a property and the land on which it sits may seem trivial. But it is not until the real estate investor focuses on these differences that it becomes easier to find more efficient investments that provide the highest return for the amount of risk or capital invested. Because property prices are a function of local supply and demand, the appearance, functionality and maintenance of the physical structure will certainly impact value, but these factors have less impact than one may think. Understanding how location and the future prospects of land values influence property returns allows investors to make better choices between competing assets.The reason that land is an appreciating asset is a simple one. It is in limited supply, and no one is producing any more. The demand for land is constantly growing as the population increases, and since its supply is limited, its price must increase over time. Unless something happens to limit demand for a given area or make it unusable, the grounds should be expected to increase in value over time. http://www.investopedia.com/articles/mortgages-real-estate/08/housing-appreciation.asp

Article: Buying a House