Real Estate 101: What New Home Buyers Need To Know

So you've decided to buy a house, but you're not sure if your finances are quite up to speed. Even if you hope to buy six months from now, there are numerous improvements and adjustments to be made in the interim, prior to taking on a mortgage.

First-time home buying is well documented as an arduous process, and much of that can be attributed to the sheer number of new and unexpected issues. Therefore, the more you know, the better you're likely to fare. Here, briefly, are some aspects buyers should consider when shoring up finances to buy a house.

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DAVE RAMSEY: Buying Home Before You're Ready A Bad Idea

Dear Dave: We’ve got $1,000 in our starter emergency fund, and we’ve paid off the last of our debt. We’re renting, but now my wife really wants to buy a house. On top of this, she wants to go the route of 100 percent financing and argues that a mortgage payment wouldn’t cost any more than we’re paying in rent. She’s extremely upset because I’m against the idea. How can I explain to her that this is a bad plan? — Alan

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Paying Off the House in 15 Years

A growing number of homeowners are choosing to pay down their mortgages at a faster rate--even if it means a substantial jump in their monthly payments.

Between January and June, 26% of homeowners who refinanced chose a 15-year fixed-rate mortgage, according to data from CoreLogic, a provider of financial, property and consumer information. During all of 2009, 18.5% of borrowers who refinanced opted for a 15-year term.

What's prompting the shift to shorter loans? Historically low interest rates for fixed-rate mortgages.

Homeowners are doing the math and realizing that rates have fallen enough so the increase in payment between a new 15-year mortgage and their current loan is no longer unbearable for their budgets, says Bob Walters, chief economist at online lender Quicken Loans.

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US Mortgage Rates Steady At Or Near Record Lows

U.S. mortgage rates stayed at or near record lows in the past week, with the 30-year fixed rate 1/2 percentage point lower than a year ago, home funding company Freddie Mac (FRE.N)(FRE.P) said on Thursday.

In the midst of volatile bond markets, home loan rates continued to keep affordability high.

Demand for loans to buy homes tumbled to 13-year lows in May after spiking in prior weeks, when buyers raced to sign contracts before a homebuyer tax credit expired on April 30. The buyer retreat is seen as temporary, with spring sales pulled into earlier months because of the credit.

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Are Builders' Incentives For Home Buyers Legal?

Question: Builders in my area are offering incentives to buyers who use their respective in-house mortgage companies. But they aren't offering the incentives to all buyers, just those who secure financing through the company-owned lender. I recently read that if the incentives aren't offered to all buyers, regardless of whether they use the builder for a loan, it is a violation of federal law. Is that correct?

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Congress Considers Mandate on 5% Minimum Down Payments

Some Republican lawmakers are calling for the Senate’s financial-overhaul bill to include specific mortgage standards that originators would be required to meet when underwriting home loans.

In exchange, they want to dump from the current legislation the “skin in the game” rules that would require banks that package loans into securities to hold a portion on their balance sheet.

Under the amendment, proposed by Sen. Bob Corker (R., Tenn.), Congress would set minimum down payments of 5%. Mortgage originators and investors who buy loans in the secondary market would also have to adhere to other standards including, documentation of a borrower’s income and assets and certain metrics to determine that borrowers were able to repay their loans.

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House Financial Services Committee Approves FHA Reform Act

The House Financial Services Committee this week approved three pieces of legislation tied to mortgage markets, including the FHA Reform Act of 2010, which allows the Federal Housing Administration (FHA) to adjust its premium structure for new borrowers.

The committee also voted to approve the Homeowners' Defense Act and reauthorized the National Flood Insurance Program (NFIP) for five years.

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