First Time Home Buyer Checklist!

Obtain credit reports from all three credit bureaus. They are Experian, Transunion and Equifax who each allow you to one obtain one free report per year. Make sure all the information is correct because one small mistake could cost you thousands of dollars with a higher interest rate. If there are mistakes dispute them on any and all reports they are present. Also a big tip to improve credit score quickly is to lower the balance to under 50% of total credit limit. For example owing $300 on a $500 card limit is far worse for you then owing $10,000 on a $25,000 card limit. First case 300/500 is 60% of total limit while 10,000/25,000= 40%. While you would owe far more money in second case it is far superior for your credit score then first case where your debt to limit is 60%. Get Pre-approved - Once your credit reports are accurate and in the best light a pre-approval is a must. No one will accept an offer on any property unless you have solid financing especially during current economic times. Down payment, in today’s economic times banks are far less likely to approve you for a loan with no down payment. You should have at least 3% down. If you don’t have one here is a quick way to get used to paying a mortgage and obtain a down payment. Set up a separate account and every month for 6 months put what your principle, interest, taxes and insurance would be if you had a mortgage. At the end of six months you would have around 3% of the loan value to put towards your house and gets you used to paying a mortgage every month. If you all ready have a down payment then use the money for an emergency fund encase anything happens the first year of home ownership. Find a full-time real estate buyer’s agent. As a first time home buyer the process of buying a house can be daunting and a buyer’s agent who represents you can clearly explain the process and all the steps necessary to purchase a property. The sellers of property will have representation so why not you? Also the seller generally pays the buyers agency fee so there is no reason not to hire a buyer’s agent. Research- Locations, schools, crime rates, neighborhoods, distance to work (commute), local amenities, inventory levels, recent sales, taxes, insurance rates, and so much more. A real estate professional can aid you with many of these areas. Patience - Buying a home isn’t like going to the store and picking up a loaf of bread. A home is most likely your largest financial investment and proper guidance from a real estate professional who does this every day is a must. Home Inspection – Never buy a home without a home inspection. A home inspection will cost you about $300-$400 which is minimal compared with the benefits of having a home inspection. A home inspection typically takes a couple hours and analyses a great deal more than the 15-30 minutes you probably spent seeing the home. Home inspection can save you from making a few hundred thousand dollar mistake by allowing you to walk away from a problem home. Home inspection can also help you in renegotiation terms based on new knowledge or issues that have been revealed during the inspection.

By: Chuck F Barnes