1. Find an agent - Finding the right agent who cares about finding your next home is the first step to a successful purchase. At Modtown our agents are highly trained and excited to get to work for you!
2. Get a Loan Pre - Approval - In the home buying process having your pre approval letter is a valuable tool to making your offer as strong as possible. To obtain a pre - approval letter from our preferred lender and to speak with a licensed loan officer please click here. Get Pre - Approved !
3. Look At Homes - When going to look at homes with your agent, be sure to print off your Home Buyer's Checklist and dress comfortably. Feel free to ask your Modtown agent any questions you have about the property and they will be happy to assist you in getting the answer.
4. Choose a Home - Once you have narrowed all the options down to your top three. Take suggestions from friends and family, look over your Home Buyer's Checklist for a side by side comparison, and choose the one that feels like home.
5. Make and Offer - Be sure to let your agent know as soon as you are ready to make an offer. Great homes go quickly and getting a contract submitted in a timely manner is important.
6. Offer Accepted!! - Once your offer is accepted by the seller it is time to immediately speak with your loan officer and make sure they have all the paper work needed. Time is of the essence to allow as much time needed to get your loan closed on time.
7. Get Insurance - Your loan officer can be of assistance in this as well as your agent for recommendations. It is recommended that you search around and compare rates.
8. Closing - When working with Modtown you will be in constant contact with your agent and closing coordinator. Make sure you mark your closing date on your calendar and plan for the process to take 1 - 2 hours. Also remember to bring your check book and I.D. to closing.
9. Get Funding - Upon funding you will be given the keys to your new home and be ready to move in. This typically can occur same day or next business day. Congratulations you are the proud owner of a new home! Be sure to contact your Modtown agent if you have any questions.

All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF Realtors are properly called Realtors. Realtors are committed to treat all parties to a transaction honestly. Realtors subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same Realtor again.

Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a Realtor.

But if you're still not convinced of the value of a Realtor, here are a dozen more reasons to use one:

1. Your Realtor can help you determine your buying power -- that is, your financial reserves plus your borrowing capacity. If you give a Realtor some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.
2. Your Realtor has many resources to assist you in your home search. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your agent to find all available properties.
3. Your Realtor can assist you in the selection process by providing objective information about each property. Agents who are Realtors have access to a variety of informational resources. Realtors can provide local community information on utilities, zoning, schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
4. Your Realtor can help you negotiate. There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Your Realtor provides due diligence during the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your Realtor can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property and can be mired in confusing status of past owners or rights of access. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your Realtor, title company or attorney can help you resolve issues that might cause problems at a later date.
6. Your Realtor can help you in understanding different financing options and in identifying qualified lenders.
7. Your Realtor can guide you through the closing process and make sure everything flows together smoothly.
8. When selling your home, your Realtor can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.
9. Your Realtor markets your property to other real estate agents and the public. Often, your Realtor can recommend repairs or cosmetic work that will significantly enhance the salability of your property. Your Realtor markets your property to other real estate agents and the public. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer. Your Realtor acts as the marketing coordinator, disbursing information about your property to other real estate agents through a Multiple Listing Service or other cooperative marketing networks, open houses for agents, etc. The Realtor Code of Ethics requires Realtors to utilize these cooperative relationships when they benefit their clients.
10. Your Realtor will know when, where and how to advertise your property. There is a misconception that advertising sells real estate. The NATIONAL ASSOCIATION OF Realtors studies show that 82% of real estate sales are the result of agent contacts through previous clients, referrals, friends, family and personal contacts. When a property is marketed with the help of your Realtor, you do not have to allow strangers into your home. Your Realtor will generally prescreen and accompany qualified prospects through your property.
11. Your Realtor can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your Realtor can help you write a legally binding, win-win agreement that will be more likely to make it through the process.
12. Your Realtor can help close the sale of your home. Between the initial sales agreement and closing (or settlement), questions may arise. For example, unexpected repairs are required to obtain financing or a cloud in the title is discovered. The required paperwork alone is overwhelming for most sellers. Your Realtor is the best person to objectively help you resolve these issues and move the transaction to closing (or settlement).

As you think about applying for a home loan, you need to consider your personal finances. How much you earn versus how much you owe will likely determine how much a lender will allow you to borrow.

First, determine your gross monthly income. This will include any regular and recurring income that you can document. Unfortunately, if you can't document the income or it doesn't show up on your tax return, then you can't use it to qualify for a loan. However, you can use unearned sources of income such as alimony or lottery payoffs. And if you own income-producing assets such as real estate or stocks, the income from those can be estimated and used in this calculation. If you have questions about your specific situation, any good loan officer can review the rules.

Next, calculate your monthly debt load. This includes all monthly debt obligations like credit cards, installment loans, car loans, personal debts or any other ongoing monthly obligation like alimony or child support. If it is revolving debt like a credit card, use the minimum monthly payment for this calculation. If it is installment debt, use the current monthly payment to calculate your debt load. And you don't have to consider a debt at all if it is scheduled to be paid off in less than six months. Add all this up and it is a figure we'll call your monthly debt service.

In a nutshell, most lenders don't want you to take out a loan that will overload your ability to repay everybody you owe. Although every lender has slightly different formulas, here is a rough idea of how they look at the numbers.

Typically, your monthly housing expense, including monthly payments for taxes and insurance, should not exceed about 28 percent of your gross monthly income. If you don't know what your tax and insurance expense will be, you can estimate that about 15 percent of your payment will go toward this expense. The remainder can be used for principal and interest repayment.

In addition, your proposed monthly housing expense and your total monthly debt service combined cannot exceed about 36 percent of your gross monthly income. If it does, your application may exceed the lender's underwriting guidelines and your loan may not be approved.

Depending on your individual situation, there may be more or less flexibility in the 28 percent and 36 percent guidelines. For example, if you are able to buy the home while borrowing less than 80 percent of the home's value by making a large cash down payment, the qualifying ratios become less critical. Likewise, if Bill Gates or a rich uncle is willing to cosign on the loan with you, lenders will be much less focused on the guidelines discussed here.

Remember that there are hundreds of loan programs available in today's lending market and every one of them has different guidelines. So don't be discouraged if your dream home seems out of reach.

In addition, there are a number of factors within your control which affect your monthly payment. For example, you might choose to apply for an adjustable rate loan which has a lower initial payment than a fixed rate program. Likewise, a larger down payment has the effect of lowering your projected monthly payment.

Knowledge and experience are the keys to successful real estate transactions. REALTOR.com(r) contains an enormous amount of valuable information, and such data -- combined with the expertise, experience and training of local Realtors -- can be the essential keys to your success.

One of the keys to making the homebuying process easier and more understandable is planning. In doing so, you'll be able to anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, planning will help you discover valuable shortcuts in the homebuying process.

Do You Know What You Want?
Whether you are a first-time homebuyer or entering the marketplace as a repeat buyer, you need to ask why you want to buy. Are you planning to move to a new community due to a lifestyle change or is buying an option and not a requirement? What would you like in terms of real estate that you do not now have? Do you have a purchasing timeframe?

Whatever your answers, the more you know about the real estate marketplace, the more likely you are to effectively define your goals. As an interesting exercise, it can be worthwhile to look at the questions above and to then discuss them in detail when meeting with local REALTORS(r).

Do You Have The Money?
Homes and financing are closely intertwined. (Financing is the difference between the purchase price and the down payment, commonly referred to as debt or the mortgage.) The good news is that over the years new and innovative loan programs have evolved which require a 5 percent down payment or less. In fact, a number of programs now allow purchasers to buy real estate with nothing down.

In addition to a down payment, purchasers also need cash for closing costs (the final costs associated with closing the loan). Several newly emerging loan programs not only allow the purchase of a home with no money down, but also underwrite closing costs.

Not everyone, however, elects to purchase with little or no money down. Less money down means higher monthly mortgage payments, so most homebuyers choose to buy with some cash up front.

As to closing costs, in markets where buyers have leverage, it may be possible to negotiate an offer for a home that requires the owner to pay some or all of your settlement expenses. Speak with local Realtors for details.

Is Your Financial House in Order?
Those great loans with little or nothing down are not available to everyone: You need good credit. For at least one year prior to purchasing a home, you should assure that every credit card bill, rent check, car payment and other debt is paid in full and on time.

Whether you're making a big purchase like a house or a new car, or a less ambitious transaction like applying for a credit card, your prospective lender always runs a credit report on you. But is everyone getting a fair shake when it comes to credit scoring?

Many call credit scoring a simple, objective way to determine one's ability to repay loans-where race, nationality and income are not considered. Others, however, believe certain scoring systems have unequal impact on minority and low-income credit applicants, as these groups are more likely to use non-traditional forms of credit.

Your Score Is Just One Factor
The credit scoring system preferred by most lenders is produced by Fair, Isaac & Company Inc. The company's software lets lenders and credit bureaus generate a credit "score" based on a borrower's credit history. Known as FICO scores, these calculations play a significant role in obtaining mortgage loans.

Fair Isaac won't say exactly how FICO scores are tabulated, but the company does acknowledge which factors it uses for calculating its totals. In order from most to least important, they are: late and delinquent payments, bankruptcies, outstanding debt, length of credit history, new applications for credit, and types of credit in use. It is illegal to include ethnicity, religion, gender, marital status or nationality in determining credit scores.

The Center for Community Change, a Washington D.C.-based housing advocacy group, is critical of FICO scores. Debby Goldberg, acting director of the group's Neighborhood Revitalization Project, says credit scoring raises several questions: Who are the people upon whom the credit scoring systems are built? How do non-traditional sources of credit affect a prospective borrower's ability to handle debt? And what happens when inaccuracies in a credit report are included in the score?

"Because this stuff is proprietary, it's difficult to get answers," Goldberg says. Fair Isaac maintains that FICO scores treat all borrowers equally.

Alternative Systems
However, regulatory agencies are beginning to pay more attention to credit scoring in the mortgage industry. Last year, the Federal Trade Commission began holding public forums on the issue.

Fair Issac appears to be responsive to such concerns. As soon as August, consumers should be able to obtain their actual credit scores from the company.

Goldberg says the U.S. Department of Housing and Urban Development is working on a separate credit scoring system and plans to publish how it works. "That may encourage some of the others to take that same step," she says.

If you're concerned about your credit history, you can order a copy of your credit report, see if there are errors and if so, correct them. You can also ask your lender for your credit score and provide your loan agent with explanations for late payments.

As Goldberg says, "You've got to be your own best advocate."

Home ownership in America has increased from 25% in the early 1900s to 67% at the end of that century. During all those years, many home buyers struggled to come up with a down payment. In some cases, the banks required as much as 50% down before they would lend on a mortgage.

Today, the desired down payment is typically 20%; however, few people have that much cash available to them. FHA loans, for example, require only 3% down. But the fact remains that the more a buyer puts down, the lower the mortgage. Low mortgage balances carry low mortgage payments.

Here are 12 ways to find that down payment.

1. Save Your Tax Refund If it's hard for you to save, you can change your withholding exemptions from 1 to zero. This will force your employer to pay more to the I.R.S. and reduce your paycheck by that amount. For some free-spending and undisciplined individuals, this method assures a fat income tax refund. Even a regular tax income refund, however, might be enough to help you buy a home.
2. Borrow from Parents It's not unusual for parents to help their children buy a home. Favorable tax laws will let each parent gift a certain amount without tax consequences (check with your CPA).
   If your parents won't give you the money, perhaps you could ask for an unsecured loan and pay it back at a better rate than your parents could get at the bank or in a money-market account? The rate you pay would likely be less than the prevailing rate from your own lending institution, which makes it win-win for everybody.
3. Sock Away X Amount Periodically
   The secret to making a savings account grow is to make identical deposits at the same time every month. For example, if you are paid every two weeks and save $200 from every paycheck, at the end of 12 months, you will have saved more than $5,200, excluding interest.
4. Sell Stuff on eBay or Hold a Garage Sale
   Everybody has too much stuff. I've never met a person who didn't. Some people spend thousands every year on storage units where this stuff is stashed. Look in your attic, your basement, under your bed and in your closets for stuff you no longer use. If you haven't used it in a year, sell it at a garage sale, put it on Craig's List or set up an eBay account and get rid of it.
   I thought I was going to have to pay somebody to come haul away my 10-year-old treadmill that was collecting dust in my family room. Put that baby on Craig's List and sold it (for a lot of money!) in less than week. You can, too.
5. Ask Seller to Give it to You
   Hey, you never know. If you pay the seller's asking price, you'd be astonished at what some sellers will do for you. Some of them will even give you the down payment as a credit or pay your closing costs or both. Check with your lender before asking for the credit because lenders have strict requirements as to how much you can receive.
6. Settle Lawsuits Fast
   From personal injury suits to civil litigation, typically delays just make the lawyers more money, apart from the fact that the time-value of money decreases as the clock ticks. We live in a litigious society where even a simple auto accident involving slight bumper damage ends up being filed in court. Settle the case quickly and use that reward to help you buy a house.
7. Check out Government Programs
   If you've served your country in the armed forces, you may qualify for a loan backed by the Veterans Administration, known as a VA loan. The government also runs a slew of down payment assistance programs for first-time home buyers. Also, check with your county to see if it offers special programs to induce home ownership in certain neighborhoods.
8. Take a Second Job
   Some renters will sacrifice evenings to work part-time at a second job. If it's a short-term situation, it might not be that hard to do. It could also be seasonal work such as from Thanksgiving to Christmas or specialty work around tax time in the spring.
9. Ask for a Raise
   Sit down one evening and write up a list of every thing you have done over the past year that made your company money or somehow increased its bottom line. List every accomplishment. Then take that list to your boss and ask for a raise. Ask for more than you think you will receive. You never know, you might get it.
10. Get a Better Paying Job
    As long as your field of employment remains the same, taking a different job should not affect your mortgage application. Maybe it's time to look for employment elsewhere that will pay more. Check with your local employment office, network with peers and send résumés to companies where you want to work, regardless of whether it advertises a position.
11. Tap Your Retirement Funds
    Certain retirement accounts will let you borrow from them to buy a home. Check with your CPA for current regulations. Some types of requirement accounts will let you take out the principal balance without a penalty.
12. Consider 100% Financing
    If you have excellent credit, you may qualify for a 100% loan. This could be a single mortgage guaranteed by mortgage insurance, or you could finance a combination or piggyback loans, comprising 100% of the purchase price. Talk to your mortgage broker to see if you qualify.

With inventory diminishing daily and multiple offers being extremely common, it is of great importance that you position yourself to have the "Best Chance" to get your offer accepted. You enhance your chance of getting the home of your choice by doing the following:

Get pre-approved for the purchase:
This takes very little time and is of great value. At this time, identify the price range for which you qualify and which fits your lifestyle.

Submit a strong competitive offer:
Submit the offer as if there will be multiple offers.

Include substantial earnest money deposit:
Acceptance of an offer is sometimes determined by the amount of the deposit. A larger amount may signify a bigger commitment to the seller.

Minimize or eliminate contingencies:
The fewer contingencies, the stronger the offer.

Make a buyer profile available:
Time on the job, flexibility, reason for purchasing seller's home, etc.

Be prepared to preview a new property quickly:
Homes sell sometimes in hours. Be prepared to make decisions quickly and be accessible to change the terms instantly.

Buyer and agent to have instant communication access:
Let us maintain instant access to each other via office phone, voice mail, fax, pager or cellular phone.

Words you will hear few real estate agents mutter: Not everybody should own a home! Some people aren't cut out for home ownership, for a variety of reasons. Are you one of those who should rent and not buy? Here are some ways to tell.

Bad Credit Report
Does your credit report tank? If your FICO score is below 550, you're not going to receive a good interest rate for a loan and, in fact, that kind of score could dump you into the hands of a predatory lender. Not a good sign.
If you have a bad credit report, you should work on fixing it before applying for a loan. Four late payments is enough to disqualify you from obtaining a loan. You can order your credit report free online.

High Debt Ratios
Lenders consider two ratios: front-end and back-end.
The front-end is your mortgage payment, plus taxes and insurance divided by your monthly salary.

The back-end adds your monthly debt payments to your PITI payment before dividing that total figure by your salary. A 50% debt ratio is a high ratio. A high debt ratio means you may not qualify for the loan. If you should find an unscrupulous lender that is willing to fund such a loan, you may not be able to afford to feed yourself, even if you eat dirt.

Job Instability or Relocation
How secure is your job? A high-rolling Sacramento buyer purchased a home in Midtown. His mortgage payments were $3,500 a month, which was a lot for a 25-year-old. However, that payment was affordable while this guy was earning an annual $120,000 salary. But when he lost his job, he also lost his home to foreclosure.

Is Your Job in Jeopardy?
Is your company lying off? Could you be fired and, if so, how hard would it be to get another job right away? Unemployment compensation is rarely enough to cover mortgage payments.

Relocation.
Are you likely to be transferred to another city within the next two to three years? If you had to sell due to a job transfer, your property would need to appreciate at least 10% to cover the cost of selling; otherwise, you would lose money on the sale. When you buy a home, you should plan to stay put for a while.

Maintenance Issues
All homes require upkeep and maintenance. Not everybody has the where-with-all, much less the desire, to tackle home repair projects. In addition, many first-time home buyers can not afford to hire a professional to fix things that break. Experts suggest you set aside 5% of the purchase price to cover maintenance and repairs when you buy a home.

When Renting Costs Considerably Less
If your mortgage payment would be triple the amount (or more) you would pay for rent, it might not make financial sense for you to buy. For example, if it would cost you $2,000 a month to rent what would cost you $6,000 per month to own, does it make sense to pay $48,000 a year more to own a home?

If you are in a 30% tax bracket, you might not come close to recouping the difference you paid. Say your deductible expenses are $5,000 a month; 30% of that is only $1,500, which would be your true tax savings per month. Would you spend $6,000 to save $1,500? For more information, please consult a tax accountant or CPA.

1. Are both fixed-rate and adjustable mortgage loans available?
2. What is the interest rate?
3. How long can I "lock-in" the financing at the current interest rate?
4. Is a float down lock available in case rates drop after I have locked in?
5. What are the other fees a lender may charge me in conjunction with my loan?
6. Are funds for a second mortgage available?
7. On adjustable loans:
8. How often will the interest rate be adjusted?
9. Is there a maximum limit on each rate change?
10. How often will the monthly payment be adjusted?
11. Is there a ceiling on payment adjustments?
12. Can the term of the loan be extended?
13. What is the maximum rate that can be charged over the life of the loan?
14. Is there any potential for negative amortization?
15. Is there a pre-payment penalty clause? This involves extra charges for paying off the loan before maturity. About 80% of all loans in the United States are paid off early.
16. What is the "grace" period? How late can a monthly payment be made before a late charge is assessed? What will happen if a payment is missed?
17. If you sell your house, will the new buyer (if he/she qualifies) be able to assume your mortgage at the same interest rate?
18. Do you have to pay "points" to get your new mortgage? Usually lenders charge points for the cost of giving you a mortgage loan. A "point" is 1% of the loan.
19. Will the lender require mortgage insurance?
20. Is the loan serviced locally or is the servicing sold?
21. Ask for a written "good faith deposit".

Fixed Rate Mortgage
The interest rate stays the same throughout the term of the loan - usually 15 or 30 years - so the principal interest portion of your payment remains the same. Payments are stable but initial rates tend to be higher than adjustable rate loans and often cannot be assumed by a subsequent buyer.

Balloon Mortgage
This is a loan which must be paid off after a certain period. The advantage they offer is an interest rate that is lower than a mortgage that is made for 30 years.

Adjustable-Rate Mortgage (ARM)
The interest rate is linked to a financial index, such as a Treasury security or a cost of funds - so your monthly payments can vary up or down over the life of the loan - usually 25 to 30 years. Interest rates can change monthly, annually, or every 3 or 5 years. Some ARMs have a cap on the interest rate increase, to protect the borrower. Other terms relating to adjustable-rate mortgages:
Adjustment period: The length of time between interest rate changes. Example: one year ARM-interest changes annually.

Cap: The limit on how much an interest rate or monthly payment can change at each adjustment or over the life of the loan. Conversion clause: A provision in some loans that enables you to change an ARM to a fixed rate loan, usually after the first adjustment period. This may require additional fees.
Index: A measure of interest rate changes used to determine changes in the loan's interest rate over the term of the loan.
Margin: The number of percentage points a lender adds to the index rate to calculate the ARM's interest rate at each adjustment.

VA Loan
The VA does not lend money, it guarantees a portion of the loan so that lenders who originate the loan feel comfortable with their risk. Qualified veterans can obtain loans up to $203,000 with no down payment. VA-guaranteed loans can be combined with second mortgages and are assumable upon qualifying by any future buyer.

FHA Loan
FHA does not lend money or make a loan; rather, it insures loans. The down payment can be as low as 2.25%. Discount points may be paid by either buyer or seller. FHA charges a 2.25% up front Mortgage Insurance Premium (or as little as 2% for a first time home buyer) that can be financed in the mortgage amount or paid in cash (no premium is required for condominiums). The borrower must also pay an annual Mortgage Insurance Premium or .5% which is collected monthly.

Seller Assisted Second Mortgage
The seller of the house lends the buyer enough to make up the difference between the purchase price and the down payment plus first-mortgage balance (a commercial lender may also make this kind of loan). The terms including the interest rate, are based on buyer/seller agreement. It is often a short-term (5 to 15 year) loan; sometimes "interest only" payments until the term date when the balance is due in full. A buyer can then refinance the home.

Assumable Mortgage
Buyer "takes over" or assumes the mortgage obligation of the seller (with concurrence of the lender). The interest rate doesn't change and is sometimes lower than current rates. Often the loan fees are less as well.

1. Copy of your Purchase & Sale Agreement.
2. Your present mortgage information.
3. Two year history of employment and verification of all income sources.
4. If self-employed, copies of past two years Federal Income Tax Returns.
5. Information about your checking, savings and credit card accounts.
6. Name, account number and outstanding balance of each of your debts.
7. Application deposits.
8. Information about any assets.
9. Information regarding any other assets that will be used as funds to close.
10. If FHA - Copy of Social Security card and photo ID.
11. If VA - Certificate of Eligibility or DD214.
12. If Employee Relocation Client - include relocation information and copy of offer, promissory note and copy of check on bridge loan.