Plan Before You Look

The neighborhood you choose for your new investment is almost as important as the home itself.  It is best to get a notebook to keep future notes in on houses you like.  On the first page in the notebook you will want to write down the things you need in a house and the things you want in a house.  Generally buyers only get about 80% of what they want in a house so there will be things with which you will need to be willing to compromise.  Now is the time to decide what you will compromise on and what you need.

If you are having trouble here are a few ideas to help you along.  What type of neighborhood do you want? Subdivision, rural, or downtown area? How far you have to travel to work may play an important role in where you choose to live.  How many miles are you willing to travel from your home?  If you have children, would you rather they be in a certain school zones?

Those were some of the bigger questions, now that you have those out of the way its time to get down to details.  How many bedrooms and bathrooms?  Do you want a formal dining room?  How many square feet would be large enough?  Do you want a fireplace? A large kitchen or porch? Maybe a home office?

Where it may seem like a lot, writing it all down will help to keep things in perspective.  If you are a first time homebuyer, the buying process can be just as stressful as it can be fun.  Having your wants and needs on paper will help, not only to keep your head on straight, to keep things in perspective.

The last important thing you need to keep in mind is resell value.  You may be intending to stay in this house for the rest of your life.  However, life has a way of throwing curve balls.  If ever you need to sell, you will want your house to sell for the best possible price.

If you are interested in looking at homes in the SWLA area give me a call and I will help you through the process!

Get Your Credit in Order

If you do not already keep track of your credit, then one of the first things you will need to do before contacting an agent or mortgage company is to get your credit in order.  Lenders will be taking a close look at your financial history, including; income, credit, debts and assets.  You'll be asked to disclose to the lender all outstanding debts, including any loan or financial obligations such as credit card balances, alimony and child support payments, car loans, medical bills, etc.  Lenders will also want to see how much money you have in savings, after deducting your down payment amount.  You'll also be asked for your employment history and will need to show job and income stability and security.  You can visit http://www.annualcreditreport.com/ and request a free credit file disclosure or free credit report once every 12 months.

Here are a few tips to help you to improve your credit score:

• Address any corrections that are needed on your credit report.  Most credit reports have at least one error
• Pay down any outstanding debts as much as possible to show lenders that you spend within your limits.
• Ask your credit card companies to issue credit line increases to lower the percentage of the credit limits that you currently have.
• Do not apply for new credit cards.
• Pay all of your bills on time, even if that means just making the minimum payments.

Getting your credit in order can help in many aspects of your life.  It is essential to check it prior to getting pre-approved as your credit will affect your mortgage approval.  If there are errors on the report it could lower the amount for which you could be approved.

The Importance of Pre-Approval

Most buyers contact a real estate professional prior to being pre-qualified or pre-approved.  Getting pre-qualified allows you to know how much house you can afford based upon your credit, income, and assets.  Once you are pre-qualified you can know how much your mortgage payments can be, the price range in which you can purchase a home, how much down payment will be necessary, approximate closing costs, and the types of loans that are available to you.

Pre-approval takes it one step further.  The mortgage professional will now get your paycheck stubs, W-2's, retirement information, etc.  If your credit has not already been checked then they will do so at this time.  Lenders will review your financial circumstances including income, debts and assets to determine the loan amount for which you qualify.  The lender will issue a letter indicating the amount you are qualified to borrow.  Mortgage pre-approval gives you a couple of advantages.  First, it lets you know on the front end how much money with which you have to work.  Second, it signals to sellers that you are serious about an offer and that you can indeed qualify for the necessary mortgage to complete the purchase.  If you make an offer on a house with multiple bids, being pre-approved can often give you an edge over other offers.

If you need a referal to a mortgage professional give me a call!