Need-to-know home buying info for first-timers

Homeownership starts with a desire to achieve the American Dream – to have a home of one’s own. After that, however, pragmatic questions must be answered, such as how much a buyer can afford and whether a bank will be willing to lend them money.

“Buying a home can be one of the biggest purchases a consumer will make,” says Cheryl Nolda, president, Home Lending Solutions, RBS Citizens Financial Group. “A house is the foundation where individuals and families build their lives and make memories.”

Charter One Bank put together a list of home buying tips for consumers who have decided that homeownership is right for them:

• Determine purchasing power. Calculate how much you can afford to spend before you start looking to focus on houses in that price range. The answer depends largely on income and current monthly debt payments.

• Secure your credit report. If there are any credit issues, get them addressed before applying for a mortgage loan. A free annual credit report can be obtained by calling 1-877-322-8228 or going to:www.annualcreditreport.com.

• Do your mortgage homework. Take the time to learn important mortgage and home-buying terms; more importantly, understand what they mean. Investigate the details – What are the additional costs, such as origination or application fees?

• Get pre-approved. A mortgage pre-approval assessment tells you approximately how much money you can borrow from your lender. In addition, many sellers require a pre-approval letter before reviewing a buyer’s offer. (After applying, avoid doing anything that would negatively impact your credit score, such as opening a new credit card or making a large purchase until after the home closing.)

• Buyer’s checklist. Use a homebuyer’s checklist at each house to keep track of important features like amenities, neighborhood and schools. This helps you compare notes and remember the differences and characteristics of each house, especially if you visit several houses in different locations.

• Know the market. When you know local market and home values, you’re less likely to overpay for a property. Use the Comparative Market Analysis (CMA) and full MLS listing details of the most similar comparable properties to help you know how much you should offer. And be on the lookout for owners who are eager to sell and willing to negotiate – this can save you thousands of dollars.

• Home inspection. Hire a professional home inspector to determine if there are any potential problems that can be expensive to repair.

• Have a backup plan. You and a seller may reach a stalemate when negotiating. Consider developing a back-up plan, just in case you are unable to reach an agreement. Define your maximum offer and don’t go over it – there are almost always other homes that will meet your criteria.

Source: Florida Realtors®