What to do first, when considering buying a house?

After several years of being in this business, I have had a ton of people asking me what should be the first step in the home buying process once someone has made up their mind to buy. If I had to say as a Realtor, and I'm sure that most others would agree with me when I say that getting pre-qualified for a home should be the first step of your process. This way you know exactly how much of a home you and your family can safely afford and still live comfortably. Plus, it's more like a shopping spree. Now you know exactly how much the banks are willing to lend and you can gage your taxes, insurance and others fees associated with the home of your dreams accordingly. And not to mention, you will have the ability to shop around and get the best bang for the buck.

1. Credit Report

Your credit report is a current and historical record of your credit history, current activities and current and past employment. It also holds action taken against you due to discrepancies such as unpaid/ delinquent accounts, bankruptcy, judgments, and/or liens filed against you and inquiries. Here are the three major credit reporting agencies that most lenders refer to when obtaining your credit information. You are owed one free copy of your credit report per calendar year. This is very important because this can determine things such as interest rates, credits, and even approvals. Having a close eye on your credit makes a difference.

• Equifax
  1-800-685-1111
  www.equifax.com
• Experian
  1-888-397-3742
  www.experian.com
• Trans Union Corporation
  1-800-888-4213
  www.tuc.com

2. Expenses

Another best practice is to know your expenses. It is safe to say that when most home buyers begin there quest for home-ownership, a vast majority of folks had no idea of what to really expect. When you think about it, sure the monthly mortgage comes to mind, but what about things like HOA fees (home-owners-association), home warranty insurance, escrow accounts, HUD, property taxes, school taxes, flood or hazard insurance if applicable in certain areas. These are all fees that could rack up rather quickly if not properly prepared. It was said that if most homeowners that lost their homes during the crisis had an extra surplus of income that equaled a minimum of $400, it would have been the difference in keeping their homes and foreclosure. Just $400 Bucks, that's it. It may not sound like much to some, but to some, amongst all of the other obligations life has, this could be devastating. Think of it this way. If you have car insurance and was forced to pay your deductible to repair your vehicle, would you have an emergency reserve to pull from that would not make it tight in other areas of your life? For some, I can understand how this could be difficult. Never-the-less, in case of an emergency, are you prepared?

Most lenders would be able to add up these fees using a mortgage calculator and give you a better projected idea of what to expect. In some cases, a mortgage could carry up to a 30 year note. Make sure you are ready. But not to worry there are safe guards put in place to assist you should anything unexpected happens. Consult your lending professional for details. This may be the best way to determine which lender to choose.

3. Location

Knowing and understanding the demographics of the area will better help you make a wise and informed decision. Ever heard of the term, "location, location, location"? It truly is important. The home you are purchasing is not just a home, it's an investment. It would be wise to view it as such. Whether you are purchasing a starter home, vacation home or investment property, you should take in consideration, how will this area hold up over a few years? If it is a waterfront property, things such as erosion could cause problems for you in the future. Zoning plans and future build outs are things to take in account. Are there plans for a freeway and or will there be major construct? Will they build a wasteland next to my property? Imagine a backyard event with a cool breeze of garbage? Will there be a shopping center and new park that will add to the value of my home. Even school districts could make or brake an area. All vital things to consider.

If there are any other topics you may want to know more about or any specific things that interest you, I challenge you to comment and post them below. If there is anything I could do to assist you in purchasing or selling a home please feel free to reach out. Also, if you would like a free download of a recent foreclosure list for properties in you area click here. Your feedback is greatly appreciated.