It's looking good out there; it's time to buy that house

By
Real Estate Agent with Roy Wheeler Realty Co.

Bleak House Rd, Earlysville, VA, Virginia Gardner RealtorIt's a new year, and it's feeling really good "out there".  Consumer confidence is improving, and we are moving ahead again.  Interest rates are still at record lows, and inventories remain at levels that give home buyers an edge.  I feel very positive about our local market; we are poised for the rebound.  If you've been fence-sitting, following are some first steps to get you started.  I welcome the opportunity to meet with you, to get acquainted, and to assist you in the home buying process. Let me design a tailored search of local houses that meet your wish list.  Visit my website, CharlottesvilleHOME.com or go straight to the Dream Home Search form.  You'll receive daily updates of new listings as they come on the market.  I look forward to hearing from you!

 

7 Steps to Take Before You Buy a Home
Article From BuyAndSell.HouseLogic.com
By: G. M. Filisko
Published: February 10, 2010

By doing your homework before you buy, you'll feel more content about your new home.

Most potential homebuyers are a smidge daunted by the fact that they're about to agree to a hefty mortgage that they'll be paying for the next few decades. The best way to relieve that anxiety is to be confident you're purchasing the best home at a price you can afford with the most favorable financing. These seven steps will help you make smart decisions about your biggest purchase.

1. Decide how much home you can afford
Generally, you can afford a home priced 2 to 3 times your gross income. Remember to consider costs every homeowner must cover: property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care if you plan to have children.

2. Develop your home wish list

Be honest about which features you must have and which you'd like to have. Handicap accessibility for an aging parent or special needs child is a must. Granite countertops and stainless steel appliances are in the bonus category. Come up with your top-five must-haves and top-five wants to help you focus your search and make a logical, rather than emotional, choice when home shopping.

3. Select where you want to live

Make a list of your top-five community priorities, such as commute time, schools, and recreational facilities. Ask your REALTOR to help you identify three to four target neighborhoods based on your priorities.

4. Start saving

Have you saved enough money to qualify for a mortgage and cover your downpayment? Ideally, you should have 20% of the purchase price set aside for a downpayment, but some lenders allow as little as 5% down. A small downpayment preserves your savings for emergencies.

However, the lower your downpayment, the higher the loan amount you'll need to qualify for, and if you still qualify, the higher your monthly payment. Your downpayment size can also influence your interest rate and the type of loan you can get.

Finally, if your downpayment is less than 20%, you'll be required to purchase private mortgage insurance. Depending on the size of your loan, PMI can add hundreds to your monthly payment. Check with your state and local government for mortgage and downpayment assistance programs for first-time buyers.

5. Ask about all the costs before you sign

A downpayment is just one homebuying cost. Your REALTOR can tell you what other costs buyers commonly pay in your area-including home inspections, attorneys' fees, and transfer fees of 2% to 7% of the home price. Tally up the extras you'll also want to buy after you move-in, such as window coverings and patio furniture for your new yard.

6. Get your credit in order

A credit report details your borrowing history, including any late payments and bad debts, and typically includes a credit score. Lenders lean heavily on your credit report and credit score in determining whether, how much, and at what interest rate to lend for a home. Most require a minimum credit score of 620 for a home mortgage.

You're entitled to free copies of your credit reports annually from the major credit bureaus: Equifax, Experian, and TransUnion. Order and then pore over them to ensure the information is accurate, and try to correct any errors before you buy. If your credit score isn't up to snuff, the easiest ways to improve it are to pay every bill on time and pay down high credit card debt.

7. Get prequalified

Meet with a lender to get a prequalification letter that says how much house you're qualified to buy. Start gathering the paperwork your lender says it needs. Most want to see W-2 forms verifying your employment and income, copies of pay stubs, and two to four months of banking statements.

If you're self-employed, you'll need your current profit and loss statement, a current balance sheet, and personal and business income tax returns for the previous two years.

Consider your financing options. The longer the loan, the smaller your monthly payment. Fixed-rate mortgages offer payment certainty; an adjustable-rate mortgage offers a lower monthly payment. However, an adjustable-rate mortgage may adjust dramatically. Be sure to calculate your affordability at both the lowest and highest possible ARM rate.

More from HouseLogic
Learn how Fannie Mae and Freddie Mac mortgages can help you save on financing 

Learn more about the costs of homeownership

Other web resources
Homebuyer counseling resources

Get a free credit report from each of the three credit reporting bureaus
 

-G.M. Filisko is an attorney and award-winning writer who has thrice survived the homebuying process. A frequent contributor to many national publications including Bankrate.com, REALTOR Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

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Rainmaker
424,571
Frances C. Rokicki
Fran Rokicki Realty, LLC - Bolton, CT
Broker-Mentor,CRS

Virginia, Very good and helpful tips for buyers, in this economy.  The rates are awesome.  Moving up to a larger home is a good plan to have this year.  Many of my clients have moved up to a larger home and are still paying less for the mortgage payment, than they were in the small home.

Jan 06, 2011 12:10 PM #1
Rainmaker
424,571
Frances C. Rokicki
Fran Rokicki Realty, LLC - Bolton, CT
Broker-Mentor,CRS

Virginia, I wanted to let you know that my Daugher, went to college at Lynchburg.  We have visited your town and it is a lovely area.  Many of the landscape is similar to ours in Connecticut.

Jan 06, 2011 12:12 PM #2
Rainer
148,940
Virginia Gardner
Roy Wheeler Realty Co. - Charlottesville, VA
Realtor, Charlottesville, Serving Central Virginia

Hello, Frances, you're right, the key is being able to price their existing home right to get it sold and then have them slide into the larger property with a lateral move financially.  It's all good.

Jan 06, 2011 02:54 PM #3
Ambassador
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Judi K Barrett
Judi Barrett~Integrity Real Estate Services~Idabel, Oklahoma - Idabel, OK
Broker/Owner, Integrity Real Estate Services -IDAB

A great re-post of some really helpful information.  You've made a great choice. love the information.

Jan 06, 2011 06:44 PM #4
Rainer
148,940
Virginia Gardner
Roy Wheeler Realty Co. - Charlottesville, VA
Realtor, Charlottesville, Serving Central Virginia

Thanks, Judi!

Jan 06, 2011 07:25 PM #5
Rainmaker
1,089,576
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

WOW!  What a GREAT looking home!  I'll bet it has GREAT neighbors!

Jan 07, 2011 06:44 AM #6
Rainer
148,940
Virginia Gardner
Roy Wheeler Realty Co. - Charlottesville, VA
Realtor, Charlottesville, Serving Central Virginia

hahahahahahahaha, Wallace

Jan 07, 2011 07:19 AM #7
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Rainer
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Virginia Gardner

Realtor, Charlottesville, Serving Central Virginia
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