Archive for January, 2011

5 Steps to Buying a Howard County Home in 2011 – Step 3

Step 3: Know Your Numbers – Time for the Credit Check

So the pendulum has swung. Maybe it was too easy to get credit in the recent past. Maybe it’s too hard to get credit now. Maybe yes, maybe no. Either way, your credit score is an all important number, and you should know what it is when you are looking to buy a Howard County Home.

Everyone is entitled to go to AnnualCreditReport.com and check out their credit reports for free each year. There are three, from each of the credit bureaus – Equifax, Transunion, and Experian. The scores themselves are not free, but the detailed reports are. Check for errors and take care of any disputes that might be necessary. Each bureau provides instructions detailing how to correct any issues, which you should definitely do prior to considering the purchase of a Howard County Home.

Interestingly enough though, the scores are almost always different, as each of the bureaus has their own secret formula for taking in the data and then generating their score. A step or two from now, when your chosen lender pulls your credit scores for you, I’ll be very surprised if the numbers aren’t all different! The middle score tends to be given the most weight by potential lenders when you are attempting to qualify for a Howard County Home.

And while we’re on the subject, paying down debt is generally good, but don’t close out any accounts until you talk with your lender. Decreasing the credit available to you by closing accounts will change your ratios, and you may unintentionally lower your score and hinder your ability to purchase a Howard County Home.

Here are two links on articles regarding your credit / FICO score which you might find to be useful when preparing to buy a Howard County Home:

• http://www.idareis.com/YourFICOscore
• http://www.idareis.com/Whatisacreditscore

Did you miss the first two Steps to Buying a Howard County Home in 2011?  Step 1 |    Step 2

Step 2:  Online Research:  Look into Neighborhoods, Lenders, Realtors

Do you know the State, the County, the City, even the Neighborhood you’re most interested in?  Unlike in the past, there is so much data online that it’s usually very easy to make a lot of progress on WHERE you want to be, even before you’ve set foot in the area.  The job market, housing, cost of living, tax rates, amenities, school scores and reviews, sporting opportunities, activities for children –  All of this is but a click away.

Research and information-gathering begins early on for most buyers these days.  There are many who will begin looking at the available homes and then the solds up to a year before really feeling “ready” to start their actual search.  Others are ready almost immediately.  I think most homebuyers will agree, however, that online photos and virtual tours do NOT tell the whole story.  Sometimes the photos are better than the actual home; sometimes they’re worse.  And there’s nothing like a few drive bys, both daytime and evenings, to really get a feel for the neighborhood!

Another important piece of the early homework has to do with lending.  Start to learn about FHA mortgages in particular these days, but also VA and Conventional, depending on what will best suit your needs.  Learning the ins and out of qualifying for the mortgage is key; that can be a bigger process for many homebuyers than actually finding the home they’d most like to move into.  It doesn’t hurt to skip ahead in the steps here and talk to a lender.  Some are exceptional at answering your questions, not just the ones you’re asking, but also the ones you haven’t thought of yet!

I’ve found over the years that the more homework and research my buyers and I do for them upfront, the higher their satisfaction and peace-of-mind with their final home choice.

Best regards, Gretchen

Step 1:  Stop spending, Start Saving

Lots of things you COULD buy, but not so much you NEED to buy.  Hold off on the little stuff and keep your eye on the prize – Your first home, a bigger home, an investment property, your retirement dream.

Set up or boost up your automatic savings at the bank (click here for internet bank interest rates), pay off the credit cards, don’t buy a new car.  (Having the garage, or the new car to put in it…  Reminds me of one of my daughters years ago – spending her money to buy new purses and then having no money left to put in them!)  I know, I know, that’s style and fashion and oh-so-important.  That’s okay; you just need to decide what’s most important to you!

How much do you need?  A 20% down payment is great, but I see that happening more with mover-uppers today.  FHA is everywhere now, a complete turnaround from a few years ago, and the 3.5% down payment is the reason why.  Having another 2-3% saved for closing costs (inspections, appraisal, insurance, transfer taxes) would be terrific, although I’ve seen some nice Seller closing help making up the difference over the last year or two.

The current interest rates are the number one reason to buy now if you’ve got your other ducks in a row already.  And as the interest rates go back up, your dollars’ purchasing power goes down.  Along with the interest rates, the decrease in home prices has made Howard County affordable for many people who had to look elsewhere in years past.  So if this is the year for you, don’t wait:  Give yourself the gift of homeownership.

Best Regards, Gretchen