Avoid hiccups in buying a house by having a plan in place. Learn what what things you should have in your home ownership scheme below.
Most everyone experiences some kind of delay when buying a home. Selecting the home you want to buy is the easy part. Obtaining the financing is a whole different ball game.
But knowing the most common hindrances and planning for them can help you to avoid frustration. Below I will explain some of those common disruptions and how to plan for them.
The saying in business is: "People don't plan to fail. They fail to plan." You have to treat your first home purchase as entering into a new business deal--because, after all, you are actually doing that!
So let's get started with the awesome home ownership scheme.
There is no good reason to do any business transaction without a plan. So if you are going for a home purchase for the first time, you will need a plan, unless your true "plan" is to not know what you're doing and to fail--simplicity itself. But, I'm sure that is not the case!
Here are a few items you want to do homework on to avoid hiccups.
Below I will explain each one of these and how to make them part of your first time home buyers plan.
I hear more first time home buyers get frustrated when they find out they missed out on a tax credit that was available. Sometimes these questions come up at closing and its hard to get the credit now.
Avoid frustration and a hiccup by checking for tax credits ahead of time. First home buyers may be entitled to certain tax credits.
Not all states or counties have these special tax credits, but some do. As part of your plan, take time to investigate what is available in your area.
Sometimes its a special discount or interest rate if you are buying in a certain area. That may be the very area you want to buy a home in anyways. But if you weren't aware of that benefit, would you be upset?
It's worth your while to see what credits or savings are available in your area as part of your home ownership scheme!
This is a common hiccup for many. So let's figure out what we can do with this problem as part of our first time home buyers plan.
If you don't have credit established yet, you might need a co-signer on your loan--which is not a good idea to try to find at the last minute. So part of your plan is arranging that in advance.
Frankly, I don't recommend that! No sensible person would put themselves into that situation, not even if you're one of their favorite people. You see, if you can't make the payments, then the lenders and their lawyers go after THEM, the co-signer.
But all is not lost! If you have no credit, you can get some very easily: get a credit card, make one or two purchases with it, and then pay them off immediately. Instant great credit.
See how when you have a plan you can succeed. I was able to set myself up with a good credit history this way. I bought a stereo for $300 (I'm showing my age here) and bought it on a payment plan of $11.43 a month. I made three payments and then paid off the stereo. Whalaa, I had great credit!
Unfortunately, you do need credit to buy a house. So if you're the type that has paid cash for everything then this is going to be a hiccup for you. But now you know about it ahead of time and can work on establishing credit as part of your home ownership scheme.
After you get the loan, you can go back to paying cash or using money orders for everything. Taking these steps to establish credit is a necessary part of your first time home buyers plan.
I knew someone who wanted to take advantage of a shortsale. The price of the home was awesome! Then they applied for a loan and was told they didn't have any credit. They didn't plan ahead of time and lost the deal.
But what if you actually have poor credit? Well, your first time home buyers plan here should be to hold off on buying a home. Repair your credit first. Get caught up on past due bills.
You should not panic if this is what you must do. You have plenty of time ahead of you, and you can take your credit from poor to soaring in just a matter of months.
If there are any disputed bills on your credit, either take care of them or get documentation that they are disputed. Make yourself look strong. Don't fall into the all too common youth-trap of being impatient.
You could also investigate programs that accept lower credit scores. But how can you plan for this hiccup ahead of time? By knowing what your credit score is and what does it need to be for you to qualify. This is homework you can do ahead of time. See how your planning for success?
Another little tool in your home ownership scheme is to get a home buying checklist. Sometimes its hard to remember all the steps necessary to buy a home.
A checklist can help you stay on focus and complete all the steps. Where can you find such a checklist? I have a very useful one on this website. I'll provide a link to it at the bottom of this page.
It's very rare to be able to buy a home without a down payment or closing costs. I've seen this become a major hiccup if it wasn't planned for. As part of your first time home buyers plan, you should have some money saved for your down payment and closing costs.
If you don't think you have enough money saved for that, then you will need to look into down payment assistance or some type of home buyer grants to help you. This is the type of things you need to have in place in advance. These programs sometimes take a few months to be arranged.
Be sure you have an idea of what you are going to do for your down payment and closing costs. This is an important part of your first time home buyers plan.
The next piece to put in your first time home buyers plan is to get pre-approved for a mortgage. You are in a better place to negotiate on the sale price of a house when you have your pre-approval in hand.
The seller knows you are ready to buy. They would rather work with you than those who haven't taken this step yet. So make sure you have this as part of your home ownership scheme.
While you are exploring this option, shop your mortgage. There are several good programs out there but not all loan officers will work with them. So shopping and becoming familiar with the various programs is part of your first time home buyers plan.
One program you may want to investigate is the FHA loan products. Their programs are designed for first home buyers and are flexible.
An additional part of a good first time home buyers plan is to pick a good real estate agent. They may know the area a bit better than you do.
Even if you're buying near to where you grew up, the agent will understand the property from a professional perspective. This will help you know what to expect and what to avoid.
can also help you with finding properties in your price range. One
caveat here, find one who is good with first home buyers. That way they
will be patient and willing to answer all your questions.
Going through this interview process will help you find the real estate agent who is really motivated to help you. So ask lots of questions and watch to see how helpful they are and how available.
I've seen many a buyers frustrated because real estate agents didn't return their calls. Be selective and be careful about one your loan officer recommends. Sometimes the loan officer and real estate agent are in each others pockets. That won't work to your advantage.
Although sometimes I've seen this work very well. They help each other get the deal done and head up any hiccups. So just be savvy about it.
The final part of the first time home buyers plan is to be confident. A way to build confidence is to increase your knowledge. The more you know the more confident you'll become.
Be sure of what you have to offer to those who may be lending you their money. Without confidence you can blow loan offers. So take the time to build that knowledge and hit the bulls-eye of your home ownership scheme!
Here is the home buying checklist I mentioned above.
Do you have more questions? Have a Question is a cool place to look for answers or ask your own questions. Go ahead...pick my brain!
Don't have money saved for the down payment and would like to know if there are programs that can help? Zero Down Home Loans has some awesome suggestions for you.
Would you like to understand the various programs out there? First Time Home Buyer Programs will help you understand the various types of programs.
Go to House Buyer Solutions Home Page.
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