DON’T BUY A HOUSE!! (Till you do these first 6 things.)
Buying your first home is down right scary for most people. Your facing the unknown in most cases. Terms you don’t know…payments your not sure of…and I wont even mention the contracts to sign. Some studies show that some people are so over come with anxiety that they wont take the first steps to even buying a home.
For most of us, buying a house is the largest purchase we will ever make. and of course the first time is by far the hardest. So make sure to take advantage of ALL the home buying information you can.
To prepare, do some research and be fully informed before beginning your search for a home. Here are the six steps you should take before buying:
1) Before you start your house search, think carefully about what it will be like to be a homeowner. For most people, home ownership is the American dream and the advantages (tax benefits, sense of home, financial investment) far out weigh any drawbacks.
2) Know your credit. This is the first thing a lender is going to look at. Your FICO score will probably range from 400 on the low end to 850 on the high end…the higher the better. Contact one of the three major credit-reporting agencies to obtain your credit report and make sure it is accurate. If it isn’t, you’ll need to contact the credit agencies to find out how to resolve any issues. You can also work with a credit repair agency, but beware, as there are a lot of scam artists out there, especially online. I would not use anyone unless they were referred to you by someone you trust.
3) Know your finances. A down payment is a big barrier to homeownership. There are, however, many different loans/mortgages out there that offer low down payment options. You should work with a quality mortgage broker or banker to find out what would work best for your situation. And don’t forget the government…a HUD loan is usually a great way to get into your first home also. Again, check with your broker or banker for more specifics.
4) Get pre-approved…NOT pre-qualified. Here is the diffrence. Pre-approval means you have already given a broker or your bank all the information they want in order to actually run your credit and financies in order to see what loan you can get and how much you can actually spend on a home. Pre-qualified means some one looked at your credit application and THINKS they can get you a loan.
5) While meeting with your mortgage broker or banker, have them look into any down payment assistance programs that may be available. There are many programs out there run by counties and cities and other agencies. The trick is to know about them, first, and then to see if you qualify for them.
6) Look into first-time home buyer classes. Many lenders and Realtors offer home buyer education classes. They are usually 2 to 4 hours long and will walk you through the process of applying for a loan, working with a Realtor, making an offer, going to escrow (closing), and various other responsibilities associated with owning your own home. And realize that whoever is putting on the class is will also try and sell you on their services, which is fine, but you are under no obligation to use them.
Follow these six steps and ask questions. Make sure you understand EVERYTHING that they explain to you…if you dont understand something ASK ASK ASK! Good luck.
Filed under: Business