12 Must-Dos for the First Time Home Buyer
Organization is key in most successful ventures. It's especially true for the first time home buyer. Take a look at this list. It's kind of like "must see TV" but tailored to the home buying process!
12 must-do steps for the first time home buyer
1. Beef up your credit rating. Your credit score determines if you get a mortgage, your down payment and the terms of your loan. Check your credit rank and get rid of any bogus charges that are dragging it down.
2. Determine what you can afford. Gather income records, bank statements, W-2 forms and tax returns for recent years. Document what you pay for rent and how long you’ve been at your current address.
3. Use on-line resources. As a first time home buyer, it's important to assess what you can afford. Online calculators can help, but talking to a mortgage consultant is your best bet. Which leads us to...
4. Get mortgage pre-approval. Checking out lenders and find the best deal you can get and the best service available. This gives you vital credibility with sellers.
5. Determine your tax costs and benefits. Look at the whole picture to see how tax benefits and local taxes and fees add up for you. Don’t forget insurance and closing costs.
6. Meet with a reputable Realtor. This is an early step in checking out the local market and finding a path through the first-time home buyer’s minefield. Keep in mind that it’s the seller who pays the Realtors’ commissions.
7. Be honest with yourself. If you don’t ride around with a tool box in your car, you’re probably not the person who should buy a “fix-it-uper.” It takes a certain type of personality to make one’s home or gentrifying neighborhood a “project.”
8. Start with a broad focus. Use web sites like Zillow for easy searches and loads of information about neighborhoods. Be open to homes and areas that don’t occur to you right away.
9. Shop for bargains. Check foreclosed properties from Fannie Mae and Freddie Mac, and bank offerings on web sites like Zillow and Foreclosures.com. They offer everything from $20,000 and $30,000 rural homes to Macmansions. You could take advantage of these deals and fixer uppers with loan options like HomePath and FHA 203k.
10. Talk to the neighbors. Are streets repaired regularly? Do sewers back up during thunderstorms? How often does the power go out?
11. Find a nice place. Pick a home that is comfortable for you and your family, and that will serve you for a long time. This is not the market environment to be selling and buying homes every five years.
12. Let the government help. If you’re a veteran, check the VA loan programs offering no down payment and low interest rates. The U.S. Department of Housing and Urban Development Stabilization Act works through local organizations to help lower income buyers.
BONUS: Start with education. Download "The Only Mortgage Loan Options Guide You Need" to better understand the options brfore you. The 12-page guide covers options for first time home buyers, step-up borrowers and others.
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