tips for buyng a home

Work with the Right Realtor

If you're thinking about buying a home, you'll want to carefully choose the right realtor to work with. You should commit yourself to working with someone who can learn your likes and dislikes in homes to make the process easier. Choose a professional who specializes in residential real estate and who has specific knowledge of the local real estate and mortgage markets. The realtor you choose should listen to you and be interested in your housing wants, needs and preferences. Doing some preliminary planning before you begin your home search will make the entire process more manageable and less overwhelming!

Check Your Credit Rating

Even if you're sure you have excellent credit, it's wise to double-check before starting the home buying process. Straightening out any errors or disputed items now will avoid troublesome holdups down the road when you're waiting for mortgage approval.

You may see disputed items, in addition to errors caused by a faulty social security number, a name similar to yours, or a court ordered judgment paid off that hasn't been cleared from the public records. If such items appear, write a letter to the appropriate credit bureau. Credit bureaus are required to help you straighten things out in a reasonable time (usually 30 days).

• TIP: Make sure that any outdated derogatory entries are deleted from your credit file. Adverse credit information is not supposed to be reported or included on your credit report after seven years (except bankruptcy information, which can be reported up to 10 years).
• TIP: Cancel any inactive credit cards you may have. If you have an inactive credit card with a $5,000 limit, even though you owe nothing on it, some mortgage lenders will consider that a potential future debt. Too many inactive credit cards with significant credit limits could keep you from obtaining a mortgage loan.
• TIP: Hold off on making any major credit card or car purchases while you're waiting to apply for a mortgage. Monthly payments you're obligated to pay will be counted against you, and reduce the amount of the mortgage loan you'll be offered. Even if you've been pre-approved for a mortgage, that approval is subject to last-minute evaluation of your financial situation.

Pre-Qualification and Pre-Approval on a Mortgage

A real estate professional can help "pre-qualify" you for a mortgage before you start house-hunting. This process includes analyzing your income, assets and present debt to estimate what you may be able to afford. Mortgage brokers, or a lender's own mortgage counselors can also calculate the same type of informal estimate. Obtaining mortgage "pre-approval" is another thing entirely. It means that you have in hand a lender's written commitment to put together a loan for you (subject only to the particular house you want to buy passing the lender's appraisal).

Pre-approval makes you a strong buyer, welcomed by sellers. With most other purchasers, sellers must tie the house up on a contract while waiting to see if the would-be buyer can really obtain financing. The down side is that you may pay application fees to cover the lender's paperwork in verifying your employment, income, assets, debts and credit rating. If you later decide not to use that particular lender, you'd have to start all over again elsewhere - with no refund.

Pre-approval will also speed up the entire mortgage procedure once you've found the house you want. The only remaining question will be whether the house will "appraise" for enough to warrant the loan.

Home Inspection

Once you have made an offer on a home, you will need to schedule a home inspection conducted by an independent authorized inspector. It is extremely important to hire a reputable inspector so that you know exactly what you are buying. Do not hesitate to ask friends, family, and co-workers for advice. If you are satisfied with the results of the inspection, then you can proceed to the Purchase and Sales agreement. If the inspector finds problems with the property, you may want to negotiate with the seller to lower the price, or to pay for certain repairs on the home.