4 Timely Tips for First Time Home Buyers

4 Timely Tips for First Time Home Buyers

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As the summer months progress, the housing market will continue to gyrate, with some markets seeing continued price erosion while others may begin to stabilize. Clearly, it is a buyer’s market across much of the nation, so much so that the home shopper who has excellent credit and the resources to buy is in an excellent negotiating position.

If you’ve been holding back on jumping in to the market, now is as good a time as any to jump in. Let’s consider some tips to help the first time home buyer secure a home:

1. Your Credit — Have you checked your credit lately? Never assume that the credit score you had three or four months ago hasn’t changed today. Single digit changes may not mean much, but a 20 point or more shift in any direction can have a profound impact on whether you’re able to obtain a mortgage and at a rate that is favorable to you. Obtain copies of your credit reports from Experian, TransUnion and Equifax and your credit score from FICO.com. If there are problems on your credit reports, your FICO score may very well reflect that. Remedy problems today and you’ll avoid headaches later

2. Your Down Payment — Most lenders are requiring larger down payments which means this makes for a very good time to assess just how much you’ll have to offer. Put down under 20 percent and you’ll be faced with paying private mortgage insurance on top of your other monthly costs. If possible, raise enough cash to avoid a PMI. A PMI will stay in place until your share of home ownership increases to at least 20 percent — that makes for a difficult task if home values are continuing to slide.

3. Shop for a Loan — Once you’re serious about buying a home, then get serious with finding financing. A good place to start is with your bank, particularly if you already have multiple accounts there. You can shop online through a service such as LendingTree.com, but talk with your banker to see what discounts you get for having a loan on top of your other accounts. Your banker can do all of the preliminary work for you and give you a mortgage approval letter as well, a powerful document that can help you show the seller that you’re ready to make a purchase.

4. Talk With a Real Estate Agent — Find a real estate agent with an excellent reputation and meet with her to discuss your home shopping needs. At this point you’ve got your credit, down payment and loan approval in order; you’re ready to go, but you don’t want to waste time. Your agent can help you determine how much home you can afford and discuss with you your options. Narrow your list to home type, rooms, neighborhood and amenities. When you’re prepared to shop, she’ll direct you to the homes you really want, not the home she thinks that you should have.

Local market conditions loom large as you begin your search for a new home. Don’t be discouraged, but do be informed: some excellent deals await the carefully prepared home shopper.

SeeSayEducate.com: How to Shop for a Home Loan

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Categories: Home Financing

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Auto Trends Magazine", an online publication. Matt covers campus, consumer, business and financial topics on various websites and weblogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".