New Year’s Resolution: Buy A Home

We are wrapping up the 2011 year and are beginning to think about what we wish to accomplish in 2012.

The most common goal is to get into shape which leads to half of all gym memberships being purchased in the fist two weeks of the year. (Made that up) There can be vague resolutions such as spending more time with the family, and there can be specific resolutions such as taking that trip to Europe you always wanted to or buying that car you’ve been eyeing for some time.

There are no wrong resolutions yet many of us cannot seem to achieve them because we proclaim them without putting a plan in place to reach those goals. If you have decided to become a homeowner in 2012, the following will be most beneficial to you.

1. Don’t Listen To The Negativity

The biggest complaint in our housing market is that Lenders or Banks aren’t lending money. “It’s hard to get a loan”.
I personally do not find that to be true, the average person, who pays their bills on time will most likely qualify for a mortgage.
The media always focuses on the negative and seldom reports the positives. Everyone will have their opinions, trust your judgment.

2. Check Your Credit

Imagine finding a home for sale you absolutely love and you can afford it. How exciting!
You go to your mortgage lender to begin processing your loan but are denied because there are charges you’ve never even heard of on your credit report. A study found that nearly 80% of credit reports contained errors so it’s very important to check them beforehand. Yes, errors can be rectified but this takes time. Time that will most likely cost you the dream home you fell in love with. By law you are able to get a free copy of your credit report every year from all three credit reporting companies. To get your report visit annualcreditreport.com. The reports do not include your FICO score.

3. Start Saving

Unless you are eligible for a Veteran Affairs (VA) Loan, you will need a down payment when buying your new home. First time buyer’s can often qualify for and FHA Loan which requires a minimum of 3.5% down payment for others, expect to need between 5% and 20% depending on the circumstances. Regardless of what type of loan you plan on utilizing, it’s never a bad idea to save more than you need. I recommend having an additional 3% or so for some piece of mind.

4. Get Pre-Approved

So you have the down payment, your credit reports are accurate and you are ready to get moving.
Your next stop will include shopping for a loan officer. Not all lenders are created equal and may charge different amounts even offering the same interest rate so it’s very important not to overlook this process. Many buyers will go to one and accept whatever they’ve been given. I don’t know about you, if I can get something for less somewhere else, I do.
Getting Pre-Approved involves a lender verifying your income/debts/taxes and credit report/score to assess how much you qualify for. This will be the determining factor in types of homes you will be able to purchase and will let your realtor know you are ready to go house hunting.

5. Find A Realtor You Can Trust

Finding the right realtor can be the difference between the best experience and a nightmare. You may want to interview a few before settling with the first one you see on a bus bench. Ask friends and family for referrals and do our research. Is the real estate company trustworthy, is it reliable. I can’t stress this enough. I find myself working with some agents I swear must have gotten their license in a box of cracker jacks. Don’t get stuck with those agents! They will cost you time and in some cases your money.

As you follow these steps in the new year, it’s important to reach out when you have questions or concerns about the process so you may want to jump to #5 from the get go to guide you along the way in turning the American Dream into the reality of homeownership. I hope you found this useful and best of luck in the new year!