Step 1: Get Your Finances in Order
Many people are worried about this issue, in fact, most people don't need to worry (too much) about the effects of their credit history. However, since your credit report could contain errors, its wise to obtain copies from 3 bureaus six months prior to applying for a home loan. Under Federal Law, you have the right to challenge items on your report and the bureau then has 30 days to decide whether that item should be removed. Try to keep your credit scores 720 or above and you'll be in GREAT shape. If your credit score falls below 620, you are considered "sub prime". Help increase your score by paying your bills on time and decreasing the amount of debt you have.
Step 2: Get Pre-Approved for a Mortgage
Do you know how much house you can afford? Probably not, unless you have spoke with a lender. Choosing a lender can be as important as choosing your home. If you're comfortable with your mortgage lender, getting your mortgage and buying your home will be a less stressful and more pleasant experience. Many first-time buyers shop for a mortgage lender by shopping for different mortgage rates. However be aware that mortgages with the same rates can end up costing different amounts, because of additional costs such as origination and application fees, so shop for more than just rates. Also remember each time anyone checks into your credit it will bring your scores down. Ask your Realtor for recommendations.
Step 3: Determine Your Wants and Needs and learn to Work with a AGENT
Buying a house isn't as difficult as you might think, even if you're short on funds, but the process will go smoother if you get familiar with your Real Estate market and narrow down your wants and needs. Make your wish list and focus on the features you want in a home. Think about how many bedrooms and bathrooms you need..... whether or not you need a bonus room... if you have school age children, you will want to check out the school systems. If you have not already, now is the time to choose a Realtor, talk to several and find someone that you will be comfortable with and work closely with. But please stay with one Realtor to save you much confusion.
Step 4: Make a Offer and have the home Inspected
Working with your buyers's agent, make an offer on the house of your dreams. Some of the items that should be addressed in the offer include 1. What comes with the house? 2. What repairs do you see right off that need done? Some contract considerations are 1. How much to offer. 2. Include any closing costs? 3. Home Inspection Clause and how to address any shortcomings that might surface. 4. When will possession change hands and so on.
Step 5: Avoiding and Correcting Last Minute Problems
As your closing date nears, everyone involved in your Real Estate transaction should check their progress on a daily basis, by staying on top of things you will know immediately if there is a problem that must be dealt with.
Step 6: You're on the way to Closing
Most of the probelms are behind you now and you're on your way to closing, this event transfer the ownership of the property to you.
Closing Thoughts
The steps here are outlined in a general guide. You will encounter issues specific to your transaction, issues that happen can be best explained and handled by you Realtor.
Don't Hesitate to Ask Questions
Ask as many questions as necessary to help you fully understand the entire home buying process. You are making a long term commitment and spending a major amount of money, you will feel much better about the transaction if you stay informed and understand what is happening every step of the way.
3 Leading Consumer Credit Companies:
Trans Union:1-800-916-8800 www.transunion.com
Experian: 1-888-397-3742 www.experian.com
Equifax: 1-800-685-1111 www.equifax.com
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