If you have thought about buying a home, it's a great time to get serious about it. Mortgage rates are extremely low, housing prices are low (some say they have bottomed out), and there are a glut of houses on the market due to foreclosures from the housing bubble.
Here are a few tips to make the buying process a little smoother:
Maximize Your Cash. Coming up with money for the down payment and closing costs may seem difficult, but it doesn’t have to be. There are many programs for first-time buyers with lower down payment requirements. If you’re a little short of cash, investigate gifts from relatives and loans against your retirement plan. And in today’s buyer’s market, you can often get the seller to pay a portion of your closing costs.
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Minimize Your Spending and Pay Bills on Time. Wait until after settlement to buy that new car, or even to open a new credit card. Keep new debt and credit inquiries to a minimum so you look your best when you apply. And remember, a credit report is often obtained just before settlement, so make sure you pay all your debts as agreed.
Decide where you want to live. Choosing a community where you will feel comfortable is a big part of the home buying process. Spend some time in the areas that you are considering. Look up things like schools and crime statistics. How close do you want to shopping and recreation? Are housing values going up or down in that area?
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Pre-qualify before you buy. Take a few minutes of your time to find out how much house you can afford. You’ll learn which homes are within your price range, improve your ability to negotiate with sellers, find out how much money you’ll need for settlement, and learn which of the many mortgage programs available may be right for you. Shop around for rates and payment options. An often overlooked source for mortgage loans is a credit union, so if you belong to one, make sure you check with them as well.
Consider all your costs before buying. Check out what the average gas, electric and water bills are running for that property. What are the annual property taxes? Is there a ground rent to consider? How much will you have to spend in the short-term to fix it up, if needed? If all the costs are going to stretch your budget too far, maybe you should consider spending a little less on the house.
For more information, calculators, tips, articles and video about home buying, I invite you to visit the Destinations Credit Union "Home Sweet Home" section of my website.