Welcome to the LindaSecrist.com Blog

2011-07-12 11:04:23
6 Things You Should Do Before Buying A Home

6 Things You Should Do Before Buying A Home 

Let's face it, qualifying for and buying a home these days is not as easy as it used to be.  However, with a few not-so-difficult steps, you can simplify and make buying a home a bit easier on you and your family. If you're looking to buy a home in the near future or even in the next year or two, it's time to shape up your credit score and plan for this big step.

The following article was published on Comcast.net today.

You might be ready to buy a home, but are you armed with the knowledge you need? Do you know about credit score requirements? Are you familiar with flexible standards on Federal Housing Administration loans?

Whether you are a first time home-buyer or an experienced owner, buying a house requires a 'preflight check,' in the words of Barry Zigas, director of housing policy for the Consumer Federation of America.

Here is a six-item checklist, including tips on two types of savings you need, plus advice about what's more important than buying a house for its resale value.

'It's a brave, new world with respect to credit requirements for mortgages,' says John Ulzheimer, president of consumer education at smartcredit.com and formerly of FICO, which pioneered credit scoring.

One old rule still applies: The higher your credit score, the lower your down payment and monthly payments.

'Below 660 or 680, you're either going to have to pay sizable fees or a higher down payment,' Zigas says. And that's pretty much the cutoff score for getting a mortgage, he says.

Vicki Bott, deputy assistant secretary for single-family housing at the Department of Housing and Urban Development, says that her office has noticed much the same thing. 'While there are many qualified borrowers in the 580 range, the market today is probably (looking for) 640 to 660, at a minimum,' Bott says.

On the other end, a score of 700 to 720 will get you a good deal and 750 and above will garner the best rates on the market, Ulzheimer says.

Improve your chances by: pulling your credit reports and ensuring you're not being unfairly penalized for old, paid or settled debts, Zigas says.

Stop applying for new credit a year before you apply for financing. And keep the moratorium in place until after you close on your home, Ulzheimer says.

The buyer's mantra: Get a home that's financially comfortable.

There are various rules of thumb that will help you get an idea of how much home you can afford. If you're using FHA financing, as almost one-fifth of buyers get FHA-insured loans, your home payment can't exceed 31 percent of your monthly income. But, with some mitigating factors, FHA will let you go higher.

For conventional loans, a safe formula is that home expenses should not exceed 28 percent of your gross monthly income, says Susan Tiffany, director of consumer periodicals for the Credit Union National Association.

For a rough assessment of how much house you can afford, check out Bankrate's new house calculator.

Improve your chances by: trying on that financial obligation long before you sign the mortgage papers, says Tiffany. Before you home shop, calculate the mortgage payment for the home in your intended price range, along with the increased expenses (such as taxes, insurance and utilities). Then bank the difference between that and what you're paying now.

Not only does it allow you to build a nice nest egg, but 'you can back away from it,' or scale back, if the payments start to pinch, she says.

 

Depending on your credit and financing, you'll typically need to save enough money to put anywhere from 3.5 percent to 20 percent down.

If you're using FHA financing, then you need a score of 500 or higher. And in the 500 to 579 range, if you can find a lender, you'll have to put 10 percent down instead of 3.5 percent.

One exception: Veterans Affairs loans, which require no down payment.

Another cash expense: closing costs. Whatever your loan source, you'll also need money to pay closing costs, which run (depending on where you live), from $2,300 to $4,000. Get the average closing costs in your state at Bankrate's closing costs map.

Improve your chances by: Along with banking your own money, search out down payment assistance, Tiffany says. Often it's location-based or tagged to a certain type of buyer, like first-timers, she says. So do an Internet search with the city name, then the county name, along with word combinations such as 'down payment assistance,' 'first-time homebuyers' and 'homebuyer's assistance.'

In a buyer's market, you can also negotiate to have the seller pay a portion of the closing costs.

 

This is over and above your money for the down payment and closing. Your lender wants to see that you're not living paycheck to paycheck. If you have three to five months' worth of mortgage payments set aside, that makes you a much better loan candidate. And some lenders and backers, like the FHA, will give you a little more latitude on other factors if they see that you save a cash cushion.

That money will also help you with maintenance and repair issues that come up when you own a home. While repairs are sporadic, items such as a new roof, water heater or other big-ticket items can hit suddenly and hard.

Improve your chances by: setting aside money every month. A good rule of thumb: on average you'll spend 2.5 percent to 3 percent of your home's value annually on upkeep, repairs and maintenance, says Joseph Gyourko, chairman of the real estate department at the Wharton School of the University of Pennsylvania. If you're buying a $250,000 home, aim to bank $520 to $625 per month.


For serious home shoppers, 'the No. 1 thing is they better have everything in order,' says Dick Gaylord, past president of the National Association of Realtors. That means that, before the real home shopping begins, you want to get financing in place, he says.

And the preapproval process is 'much more extensive' than it was a few years ago, he says.

Bott agrees. 'That documentation around income and assets is very essential, more so than in the last five years,' she says.

Improve your chances by: getting financing in place 'before you walk through the first house,' Gaylord says. Otherwise, he says, 'How do you know how much you can afford?'

If you're buying today for yourself and your family, you want a home that will make you happy for the next few years.

Gone are the days when you could count on a quick sale, Tiffany says. And depending on how much you put down, and how much you have to shell out to sell and relocate, short-term ownership can be a pretty expensive proposition.

Improve your chances by: stepping back, Gyourko says, and making certain 'you like the house.'

LINDA SECRIST - LINDA SECRIST & ASSOCIATES - EVERYTHING THEY TOUCH TURNS TO SOLD!

www.lindasecrist.com
www.newutahrealestate.com
www.saltlakehomedirectory.com

FOLLOW US ON FACEBOOK

Salt Lake City real estate, SLC real estate, Salt Lake City homes for sale, SLC homes for sale, SLC Realtor, Salt Lake City Realtor, Holladay luxury homes for sale, Holladay luxury estates, Holladay homes for sale, Holladay Realtor, Cottonwood luxury estates, Cottonwoods Realtor, Walker Lane, Cottonwood Lane, Sandy real estate, Sandy Realtor, Draper real estate, Draper Realtor, Sandy homes for sale, Draper homes for sale, Murray real estate, Murray homes for sale, Murray Realtor, South Jordan real estate, South Jordan homes for sale, South Jordan Realtor, West Jordan real estate, West Jordan homes for sale, West Jordan Realtor, Riverton real estate, Riverton homes for sale, Riverton Realtor, Herriman real estate, Herriman homes for sale, Herriman Realtor, Utah real estate, Utah homes for sale, Utah Realtor, Bountiful real estate, Bountiful homes for sale, Bountiful Realtor, Davis County real estate, Davis County Realtor, Park City real estate, Park City homes for sale, Park City luxury homes for sale, Park City luxury estates, Park City ski homes, Park City retreat homes, Park City Realtor, Alpine real estate, Alpine homes for sale, Alpine Realtor, Highland real estate, Highland homes for sale, Highland Realtor, Farmington real estate, Farmington homes for sale, Farmington Realtor
 
Blog Archive
2019-12-12 13:03:19
HOMES FOR THE HOLIDAYS

2019-12-09 13:22:01
5 Home Renovations You Can Tackle During The Winter

2019-12-05 13:54:38
COME ON IN- 3 LUXURY OPEN HOUSE TOURS

2019-12-02 10:46:45
Utah #1 for Middle Class Prosperity in 2019

2019-11-26 10:40:10
HAPPY THANKSGIVING

2019-11-21 10:02:49
HAPPY THANKSGIVING OPEN HOUSE TOURS

2019-11-19 10:09:48
How To Prepare For Moving Day

2019-11-15 09:55:38
4 AUTUMN OPEN HOUSE TOURS

2019-11-12 13:49:46
8 Holiday Decorating Secrets

2019-11-07 10:19:19
VETERAN'S DAY OPEN HOUSE TOURS

2019-11-04 14:21:46
24 Billiant Staging Tips

2019-10-30 11:59:31
Hello November Open House Tours

2019-10-28 14:35:17
Utah #2 Fastest Rates of Job Growth

2019-10-23 15:20:33
NO TRICKS ONLY  A TREAT

2019-10-17 10:02:27
Fall Break Luxury Open House Tours

2019-10-15 13:30:00
OCTOBER EVENTS AND FESTIVALS IN UTAH 

2019-10-11 10:30:11
COLUMBUS DAY OPEN HOUSE TOURS

2019-10-08 10:59:05
5 Tips for Prepping a Lawn for the Winter

2019-10-03 11:18:03
FALL IN LOVE WITH UTAH  AND OUR LUXURY HOMES

2019-09-30 11:58:23
Winter- How To Prepare Your Vegetable Garden 

2019-09-26 11:51:07
Fall In Love With These Luxury Homes  

2019-09-23 12:51:45
Salt Lake City - Top Ten Best Places to Retire in 2019

2019-09-20 09:39:34
HELLO AUTUMN OPEN HOUSE TOURS

2019-09-17 13:51:51
Alta Ski Resort Ranked #1 Snow

2019-09-12 13:28:48
'GOODBYE SUMMER'

Click here to see ALL articles.


Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.