Personal Finance Advice

You’ve probably heard that it’s a Buyer’s Market right now.  This means that in many areas of the country it’s a really great time to buy a house because sellers are lowering asking prices for homes and plenty of people are selling.  This translates into a large selection of houses to choose from with many of them being offered for prices that are much lower than they would have been a couple of years ago.

If all this talk of buying a house has you interested in joining the ranks of homeowners then there are some things you need to know:

1.  Getting financing isn’t quite as easy as it once was.  Homeowners aren’t the only ones getting hit with the recent mortgage crisis.  Plenty of mortgage lenders are now a little more apprehensive about lending money to applicants who have less than perfect credit or who are self-employed.  For this reason, seek out financing well in advance before you try to bid on a home.

2.  You should save for a down payment.  Although some forms of creative financing can help you to avoid the traditional 20% down payment made on a home purchase, it’s far better to just make the 20% down payment if you can.  Save aggressively for your down payment, and if you already have a substantial down payment saved you can start saving for all the closing costs you’ll encounter.

3.  You should get your credit report as attractive as possible.  Not only should you order a copy of your credit report before applying for a mortgage loan to make sure there are no errors on the report, but you should also work quickly to get errors removed and to make any improvements you can make before you actually apply.  If there is an old delinquent account on your report, pay it off.  If a lender lists you as delinquent, but you’re current, get it corrected.  Do whatever you can in order to make yourself as attractive as possible to lenders.

4.  Your personal finances should be in order before you buy a house.  There is much more to getting ready to own a home than simply saving for a down payment or getting errors removed from your credit report.  You shouldn’t buy a home if your personal finances aren’t in order.  If you buy a house - yet eek by paycheck to paycheck because of bad financial management - you’re asking for trouble.

5.  Take your time.  Plenty of people get a real sense of urgency when it comes to buying a home.  Once they get the idea in their head that it’s time to buy a house they go full speed ahead, but sometimes this aggressive approach to buying a house can be a bad idea.   You should spend a good deal of time finding the house you want, and you should also spend time finding a lender who is willing to offer you low interest rates and attractive loan terms.

Owning a home can be an expensive undertaking, but at the same time it can be a very rewarding experience.  Approach the process of buying a home as a process involving many steps instead of one big step.