Buyers: BASIC HOME BUYING SKILLS: Strongsville Real Estate: Keller Williams Realty

By:
CJ Harrington
Keller Williams Realty
www.cjharrington.com
cjharrington.crs@gmail.com
440.336.0612


Date:
10-17-08

The sad reality in today's market is that lenders are tightening their funds, and subsequently, they expect buyers to do the same. This means, lenders now make certain mortgage applicants are gainfully employed, are sure borrowers can actually afford to pay the mortgage during its full term, make sure applicants have near perfect credit and more carefully document that buyers have the cash to cover additional costs that come with home ownership as well.
Yet, if people were really responsible for their own financial behavior that would have taken the power away from people who put them in these risky loans in the first place. Instead, people look to creative financing to do the work, because they didn't want to do the research themselves. The truth is that now it's time to do the work or cut your losses. This means, that the average buyers should take the task upon themselves to maintain their finances, and this should be quite apparent with the multiple financial debacles, which have hit the market in 2007. Whether it has been predatory lending or termination of sub prime loans, the lax attitude of the past has hit America square in the pocket book. Yet, don't be fooled, there is still a market out there for people to keep things moving. So, stop the irrational spending and look towards owning your own home. This will be you most valuable asset, and will far outweigh the loss you may be experiencing from past financial blunders. So, obviously, that sounds great, but how should you prepare for what's become a more difficult home buying ordeal.
The first word of recommendation is, set a tight budget. This mean you need to know where every penny is spent, saved and made. The simple reality is you can't know where you can cut costs until you know in detail what those costs are. For example, the Better Business Bureau offers an online template for managing your budget. This same budget will provide you with a roadmap to financial security. And just like any map, if you drive carefully, perform the right repairs and maintenance along the way, and steadily steer toward your long-term goal, you'll wind up where you want to be in the end.
The most important words you can hear right now is "save more." Honestly, being miserly is a prerequisite to homeownership. Whether your budget reveals you spend too much money on eating out or it shows movie rentals by mail cost less than screening every major motion picture live, you've already found hundreds of dollars to save. Furthermore, stop traveling, stop partying and stop unhealthy habits that could leave you too weak to take on that second job. Solidify your habit of spending only for what you need, not what you want.
If you don't have a savings account worth three to six months of your net income, you are already a financial disaster waiting to happen should there be an emergency. The reality in today's market is that in addition to money for the down payment, lenders today will expect you to have some cash left over for insurance, taxes, maintenance and other costs that come with homeownership.
Obviously, it could take years to build the kind of down payment that will get you the lowest possible rate in an expensive housing market, but think about the time it will take you to recover from a loan you can't afford. The plain vanilla truth is you really can't afford not to save.
Furthermore, read your credit report. Don't just get it. Read the darn thing. Your credit report is a report card on your credit use, the good, the bad, the ugly, and too often, the incorrect. This is exactly why you want to see it. If there are errors follow the instructions to correct them.
Next, get some direction. Don't be afraid or lazy, because this could just end up costing you more money. It's okay to ask for help. Furthermore, it's smart to ask for help. You don't know everything about buying a home. If you are a first-timer you likely know very little. Learn how to find answers. Knowledge is power, so ask some questions.
Whether it's a financial planner, financial counselor, real estate agent, mortgage broker, loan officer, family, friends, co-workers and others make sure you use these references to find those who can help you. This also means getting help in setting goals, sifting through mortgage programs, understanding the title and escrow process, finding a home and keeping a home -- all well before you are actually in the market for a home.
Learn about market and economic conditions that could impact your decision. Learn about home prices, mortgage rates, home buying costs and other issues surrounding what's likely to be your most complicated purchase ever.
So, attend workshops, seminars and classes. Or even browse for housing information from online, in a book, or at the library. Yet, honestly, the best thing is to sit down with a good professional. Remember, if you can't find the time to educate yourself, the only person to blame is you.

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