What you need to buy a home?

Things you need to do before you start shopping for a home

Here's what you need to do, and when, if you are thinking of buying a home. The home

buying process can be daunting for the first-timer because buying a home can involve

many complicated processes.

Here is a timeline starting one year before you hope to start seriously shopping for a

home. This will give you time to arrange your finances and buy a home in less time, with

far less stress.

A year before (or as soon as possible)

Pull your credit reports. Errors on your reports can force you to pay a higher interest

rate and can destroy your chances of getting a home loan. You can get free copies of

your reports from the three major credit bureaus — Equifax, Experian and TransUnion

at Annual Credit Report Look for accounts that aren't yours, collection accounts for

debts you don't owe and negative marks (other than bankruptcy) that are older than

seven years.

Your FICO credit scores

Your credit scores, which are three-digit numbers used to measure your

creditworthiness, help determine the rates and terms you can get for a home loan.

There are several credit-scoring methods, but the one used by the vast majority of

mortgage lenders is the FICO.

Consider a credit Repair/monitoring service

Normally, I think these are unnecessary for people who have only minor credit

blemishes or not at a high risk of identity theft. However, because of how important your

credit and credit scores will be in buying a home; you will need the help of an

experience government approved credit repair agency.

Start Saving

In today's real estate market, it is recommended that

you have at least a 5% down payment; if you can save up 10%, you'll have even more

financing options. You will also need to have mortgage, tax and insurance for 3 months.

6 months before

Start Looking at Mortgage

It is important that you understand the kind of mortgage that you are getting. You need

to understand the risks of the different types of mortgages and to select the right one for

your family. My advice is to select a traditional, fixed-rate mortgage.

Research all the costs of owning a home

You are excited about the great mortgage rate you’ll get; but wait! Remember that the

mortgage is just the start. You'll have to pay property taxes and insurance on the home.

There may be homeowners- or condo-association fees as well and you maybe face

higher utility bills, include water and sewer.

There will be the cost of maintenance and repair as well. Consider purchasing or

negotiate a Home Warranty, to assist with any unexpected repairs.

3 months before

Reduce your credit utilization. The FICO scoring formula is sensitive to your debt to

ratio; therefore, limit your credit card usage and monitor your revolving lines of credit.

Try to keep that balance below 30%, or even lower. Try making payment before the

statement's closing date to reduce the balance reported to the bureaus.

Don't apply, open or close any accounts. Avoid actions that could potentially harm your

credit, such as applying, opening credit accounts or closing old ones. Try and defer any

credit impacting activity until the mortgage process is completed and you've moved into

your new home.

2 months before

Get approved for a mortgage. Pre-Approve vs. Pre-Qualify

Pre-approval- a lender gives a commitment to

make you a loan Pre-qualification- a lender gives you an idea of the size of the

mortgage you might afford without making any commitments.

Having a pre-approval does give you an advantage during negotiation, especially if you

are in a multi-offer situation. Getting a pre-approval will involve giving your loan offer

permission for a hard credit inquiry, but in my opinion, it is worth it because you'll be in a

stronger position with sellers.

Begin researching neighborhoods and contact a Local Top Agent. Check Internet

listings, attend open houses and find an experienced local top agent guide to help you

refine what you're seeking.

Once you've found your home and your offer is accepted

Arrange for an appraisal, a home inspection and a walk-through. The appraisal is

required for your loan to be approved. An inspection isn't necessarily required, but I

strongly recommend it. A home inspector alert you to serious problems before you

purchase the home. The walk-through is normally done within 24 hours of the closing;

this is to make sure that the sellers have made any agreed repairs and the home is in

expected condition.

Get homeowners insurance.

Mortgage lenders require prove of a home owner’s insurance coverage prior to closing.

Shop for the best rate home insurance

Confirm amount you’ll need at closing. "Closing" is when you sign all the paperwork

and you and your bank pay the seller the agreed-upon amounts. Your attorney or title

company will provide you with a HUD 1 (itemize fees & closing costs), which can

include your down payment and your share of legal fees, paperwork costs, property

taxes and title insurance.

The home buying experience can be fun, if you are informed and prepared. Wherever

you are in the home buying process, my advice is to speak to a Local Top Agent, who

will guide and point you in the direction you should go to owning your first home.

Find a

local

TOP

AGENT

860-704-9070