Monday, December 1, 2014

5 Resolutions for First-Time Home Buyers


5 Resolutions for First-Time Home Buyers

By: If you’ve promised yourself you’ll become a homeowner for the first time in 2014, we’ve got one month to go, easy-to-accomplish resolutions to help get you there. Previously published in last year -- have you accomplished these yet?

1. Boost Your Credit Score
Your credit score will play a key role in your mortgage approval and rates. At the beginning of the year, order your credit reports from AnnualCreditReport.com, a free service authorized by federal law. Go over each report, dispute any errors, and pay off old debts.
In the meantime, avoid big-ticket items such as cars or furniture and don’t apply for new credit. Jon Sterling, a regional sales manager for real estate offices in Northern California, says, “An inquiry itself causes a credit score to temporarily drop, and acquiring more debt by buying something, or the capacity to acquire more debt by opening a new credit account, can have dramatic effects on [your] mortgage situation.”

2. Save Up to Put Down
According to Sterling, you’ll typically need a 20 percent to 30 percent down payment to qualify for the best mortgage rates. At the beginning of the year, try cutting optional expenses to save more. For example, cutting out an $85 cable bill will save you $1,020 in a year. Remember, every little bit helps you avoid higher interest rates or private mortgage insurance.

3. Find the Best Real Estate Agent
Finding a great real estate agent takes time but will pay off in the end. Sterling recommends you find a buyer’s agent who “can give you a few recent testimonials from happy buyer clients. Be sure to check those references to be sure they are legitimate.” To get started, ask friends and family for referrals or search realtor.com®’s Find a REALTOR® database.

4. Get Pre-Approved
Knowing what you can afford, what you qualify for, and what type of loan you want can help you find the best deal when you’re ready to apply for a mortgage. To get started, research the differences between conventional and unconventional loans and use a mortgage term comparison calculator to get an idea of the cost. When you’re ready to shop for mortgages, use realtor.com®’s Get a Mortgage Quote tool to see current rates and get quotes from lenders in your area.

5. Find Your Dream Home
Sterling says potential home buyers should be “reading and researching as much as they can” as soon as they can. Don’t wait until you’re ready to shop to start looking at homes. Start early by researching neighborhoods in your target city and viewing homes online to get an idea of pricing. Once you’re ready to shop, you’ll have a much better idea of what you want and what you can afford.

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