It is a Buyer’s market in most areas right now and a great time to think about buying. If you have been wanting to buy a home and thinking you can’t, it is time to start thinking about how you can. You have several options and lots to think about so here is my thoughts on where to start and what to do. There are many tools on the internet that are helpful when buying a home so I have added my opinion and included several other options for you to look into. I hope this helps you get one step closer to your dream.
First and foremost, how is your credit? Have you established good credit. A credit score of 680 and above puts you in the best position in getting a loan. But if your score is lower you will still have options. It just may cause you to have higher interest rates or you may have to do some work on your credit.
Ways to build your credit score:
The Attorney’s Guide To Clean Credit
37 Days to Clean Credit
The Best Credit Repair Package
Building Credit
All About Credit Report
What price home can you afford?
A good rule of thumb for establishing your house payment is: gross monthly – debts x 36% = house payment.
For example purposes we will use: 6% mortgage with a term of 30 years
$100,ooo.oo = $600.00 a month (appoximately principal and interest only)
This Rule of Thumb is kinda from the old school of real estate, but I find that individuals that use it the will stay in a better financial position after they buy their home. Be smart….do not buy more home than you want to pay for. It is easy to fall in love with a house but the way to maintain that love is to be happy while you are paying for it.
Choose a loan officer whom you can trust and that will take the time to talk with you about all of your options.
Question for your loan officer:
What are my closing cost? Closing cost will vary from mortgage company to mortgage company but for the most part you will be looking at paying for a credit report, appraisal fee, recording and release fee, title search/opinion, and possibly a service fee or survey. Your service fee will be the biggest variation so be aware of your closing cost and interest rates. These are the main differences as you make your decision.
Okay, now you have found out what you can afford and how you are going to pay for it.
Go Find Your Home…..My advice is that you find a real estate agent that you know you can trust and you can communicate with. Share with them what is most important to you and feel free to contact them with any questions you may have. You can look on the Internet and view some great virtual tours but when buying a home go in and take a look. Pictures can be deceiving.
Choose a Realtor®:
A Realtor you trust.
A Realtor you can talk to and communicate with.
A Realtor that works hard for you.
Know who is paying the Realtor.
What others have to say about buying a home:
Common Mistakes Smart People Make When Buying Their First Home
Seven steps to buying your home
[...] some see as a crisis others see as a opportunity. Now is a good time to buy a home in most areas and we are seeing some real opportunities for the investor. Interest rates have come [...]
When I had my credit repaired, the biggest obstacle I had to overcome was the fact that my balances were well above the recommended amount. Once I paid those down, my scores shot through the roof! Paying more than the minimum and paying on time definitely assisted me in my quest for better credit.