Join The Homeowner Fray with Resolve

December 26th, 2006

The rear-view, reflective thoughts of the holidays now turn to forward-thinking, hopeful expectations for the New Year. And while I haven’t been a big practitioner of New Year’s Resolutions, I do think it is a good time to set some goals if you’re considering your housing options in this transitioning market.

After record run-ups of the past few years, attitudes about real estate are shifting back to the traditional fundamentals–owning and personalizing real property, buying and holding over the long-term, establishing community identity. It’s back to thinking about how to LIVE, not how to INVEST. Remarkably low interest rates and the first buyer’s market in years should work together to make homeowners out of the best-prepared.

So, will 2007 be the year you get serious about becoming a homeowner? Resolve right now to take the exploratory steps that will enable you to join the ranks of the landed gentry.

Here are a few items to get you thinking:

Review your credit report.
Once a year, you can review a free copy of your credit report at www.annualcreditreport.com (a site offered by the credit bureaus). Check it over for delinquencies and other lurking surprises, so you can clean them up sooner than later. You’ll have to pay a few dollars additional to get your actual credit score, but it is well worth knowing before you make a loan application. If things are blemished, you can improve your scores with just 6 months of good credit behavior.

Talk to a mortgage broker/planner (or two).
If you’re a first-time buyer, a half-hour on the phone with a loan officer going over your income, debts, assets and liabilities can go a long way toward giving you the confidence to plunge in deeper. Will you qualify for conventional financing or will you need something more creative? Will you need mortgage insurance or will an piggyback loan be affordable? Are there programs suited to your needs, including some recently reinstated state-sponsored, first-time buyer plans?

Engage a real estate professional.
Armed with the mortgage information and a realistic housing budget, talk to a real estate broker (or agent). Tell them your timeframe upfront. A good agent will stay in touch and feed you market information for that moment when you’re ready. Can you realistically buy what you want in Lake Oswego for $300,000? Also, when it comes time to shop in earnest, you’ll want the services of a buyer’s broker in your corner to represent your interests exclusively in the transaction. Ask to see an earnest money agreement and supporting paperwork prior to writing an offer and familiarize yourself with the decisions you’ll need to make when the time comes.

Save that bonus or tax return.
Got some cabbage coming back from Uncle Sam, or perhaps some profit share or a merit bonus from work? Squirrel it away specifically for housing. Even if you qualify for that 0% down loan program, you’ll still need some cash–$250 to $400 for a home inspection and around 3% of the purchase price for closing costs. Again, conversations with lenders and real estate pros can help you plan for these eventualities.

Watch the market.
Many agents offer online home search resources, some better than others. Until you’re ready to hit the open house tours or have your buyer’s agent cart you around, you can familiarize yourself with homes in the market, amenities, time on market, and more. Is inventory sitting around or going quickly?

With advance preparations like these, you will be more relaxed and confident when you’re ready to hit the market. Here’s to the New Year!

Technorati Tags: real estate, new year, resolutions, plans

Photo by jennifer beuhrer Used under Creative Commons license.

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Entry Filed under: First-Time Buyers