Tuesday, December 18, 2012

Buying a House in 2013

Buying a house in today's market is not as difficult as it sounds, though it is something you have to prepare for. Taking a few simple steps, one at a time, can make purchasing a new or used home in 2013 a reasonable and attainable goal.

Step One: Consult a Mortgage Professional
It may be tempting to pull a credit report on your own, but it's much more reasonable to sit down with a reputable mortgage planner to review your credit history. Knowing what your credit score is, what it needs to be, and what you need to do to improve it are the first steps towards becoming a homeowner. A mortgage planner can help coach you on viable next steps.

From there, tell the mortgage planner your expectations, timeline, and budget. They'll help you create a plan of action to bring you closer to homeownership.

Step Two: Start Saving 

If you want to buy a home in 2013, start saving today. Banks want to see that you've got some stability, foresight, and capital. While the majority of homeowners purchase their home with the aid of a loan, closing costs and down payments are still required in the closing processes.

Most consumers are using FHA, or Federal Housing Administration, loans. An FHA loan requires the buyer to put down up to 3.5%. This is because the lender wants assurance that you are able to produce the money needed to make payments over the life of the loan. When meeting with your mortgage planner, make sure to ask how much money you will need to have as reserve after you pay this percentage. Again, banks want to some evidence that you'll repay the loan responsibly. The best way to do so is by having saved funds.

Step Three: List Your Needs
A large percentage of homeowners lost their homes during the housing crisis, in large because they were unable to afford the loans they had taken out.  Remember, 2013 is a new year and that means it can also be a fresh start. Do you need a five bedroom house? Do you need a four car garage? Unless your family is quite large, the answer is "no."

By defining what your base needs are, you'll have a better picture of what type of home to buy. It's a good practice when looking for a home that's not out of range, something that adequately meets your needs without going overboard. It may sound taxing, but in the end it's a big help.

These three tips are a great place to start when looking at home ownership in 2013. If you're interested in buying a home, send me an email at randy@randydurham.com, or call our offices at 423-664-1900. Our specialists can walk you through credit history, a savings plan, and defining the needs your home will need to meet. Don't forget, buying a home is a process, but that doesn't mean it has to be a difficult one. With adequate planning, we truly believe that anyone can become a homeowner. If you're interested, contact us and start planning today!