“Studies on homeownership prove that it enhances our lives in many ways, and among them is how we plant deeper stakes within the communities we call home,” notes John L. Heithaus, CMO of MRIS, a network of over 45,000 real estate professionals. “Since navigating the housing market has become more complex than ever – any potential homebuyer, whether a first time buyer or not, can benefit from solid professional advice in their pursuit of homeownership.” To that end, MRIS has compiled the following list of “must read” tips, reinforcing some of the best practices for ensuring that potential homebuyers are home-ready.
• Understand and update your FICO credit score. This single number plays a major role in determining the interest rate on your mortgage, so it’s vital to know what your FICO score is, address any discrepancies and take corrective action to improve your score if it’s below par. As of May 2012, 664 was listed as the national average, and the median was listed as 723. According to Heithaus, individuals with scores of at least 700 tend to get the best rates on a mortgage. Each of the nationwide consumer reporting companies – Equifax, Experian, and TransUnion – are required to provide you with a free copy of your credit report, at your request, once per year. To order, visit www.annualcreditreport.com.
• Know what you can afford. Up to 12 months in advance of your desired home purchase, establish a relationship with a trusted mortgage lender who can help you identify your monthly payment goals, target purchase price and the types of loans you are qualified for based on your current financial situation.
• Boost your savings. After you have determined your monthly payment goals and target purchase price, make sure you have the cash on hand for when you are ready to buy. We suggest saving enough money for six months of mortgage payments, as well as a minimum of 3.5 percent of the purchase price to cover the down payment and closing costs. First-time and repeat homebuyers should also establish reserves for less visible expenses, such as closing costs, moving costs, home repairs, renovations and planned upgrades when saving for a home.
• Avoid making major purchases. When preparing to buy a home, it’s important to stay away from big-ticket items, such as purchasing a car, in order to keep your cash reserves high and show the lender that you’ll be able to service the mortgage debt more easily.
• Understand the micro-local real estate market. Homebuyers can save themselves money by watching the seasonal trends in their targeted area(s) and being financially prepared to make an offer when the time is right.
• Consult a real estate professional. Long before you are ready to buy, seek out and interview up to three real estate professionals who can prepare you to face the market by addressing questions, setting realistic expectations and providing valuable insight and expertise to the complex process of home purchasing. Heithaus advises that “This is no time to ‘go it alone,’ and an expert real estate professional can help navigate you through a successful purchase.
The tips above were provided with support by MRIS customers Teresa Tolson, Teri Deane , Colleen Minahan , and Debbie McKeen. Article reprinted from RISMedia: http://rismedia.com.