A Home Inspector’s Weblog by Frank Schulte-Ladbeck

exploring homes and the lives in them around Houston

Clarification of home mortgages

Did I write too soon in my last post about the mortgage market? On this past Friday, another mortgage company called it quits, and a bank in Germany which had been involved in the American mortgage market had to be bailed out. Still, I do not think my post was inappropriate.

There are ads floating around promoting home loans, and the basic premise that banks and other lenders want this business is sound. What I need to clarify is the facts about what would help you obtain that loan that were not previously stated.

1) Some money in the bank. With closing costs and costs for due diligence reports (like my home inspection reports), will cause you to have costs which cannot be defrayed to credit. This is not true on all fronts (some home inspectors like myself and other service providers will accept credit cards), but there will be some payments which you will need cash. There is also the down payment to consider.

2) Do your homework. There can be repair costs, or fees for setting up services after you move in. If you have been living in an apartment, you will discover the joy and agony of maintaining your landscape. Just think about what owning a home entails, and what the costs associated with that fact might be.

Most cities and states have some type of department of housing, which has information or programs about home ownership. I suggest attending a program for buying a home offered by HUD, even if you are not going for a HUD loan. For individuals who are new to this home buying adventure, it can help you avoid mistakes.  In Houston, Mayor White and the city administration  have made a great effort to inform people of these programs (go to the city’s website to link to the appropriate pages).

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