Homeownership: A lasting resolution
The New Year is just around the corner and millions of Americans are once again agonizing over which resolutions they will take with them into 2007. The gym membership will be renewed, with promises that it won’t go unused after Feb. 1. This will be the year you will fall in love, quit smoking, get a better job and finally go through the ominous stack of files that have been in the attic since 1985. Right?
Why not make this year’s resolution one that will last long into the future — long after you’ve stop bothering to set the alarm an hour early to go for a run and decided that attic organization is overrated. Buying a home is one of the best investments you can make. Resolve to assess your finances and get on the path to homeownership with these following tips.
“First of all, figure out how much you can afford. This depends on many factors, including your credit rating, your current expenses, cost of a down payment, and interest rates.
“The National Association of REALTORS® (NAR) recommends that potential buyers check their credit report carefully. This can be an important step. According to NAR, buyers with inaccurate information on their credit report may have a hard time obtaining financing, or may be offered loans at higher-than-market interest rates. Work with a qualified lender on getting together a budget and collecting helpful advice before buying a home.
“When shopping for a mortgage, consider all of your options. The Mortgage Bankers Association (MBA) recommends that potential buyers build a list of lenders you are interested in to stay organized. Word of mouth also can be powerful, and MBA recommends talking to people you know that own their home and see how they like their lender. Don’t fill out any paperwork until you have met with several lenders on your list and don’t settle for your first offer. There are many options in terms of a loan and not every option is right for every buyer. Make sure you are dealing with someone you trust and work well with.
“Don’t forget that you will need a down payment up front and money to make monthly mortgage payments. Keep in mind that tax advantages to being a homeowner can help offset these costs. Being late on these payments can lead to foreclosure in a worse case scenario, so be realistic and shop around until you find something in your price range.
“Familiarize yourself with the mortgage process before you begin looking for a home. You will have a better idea of what is and is not in your price range. Don’t forget to research Federal Housing Administration programs that offer lower down payments. They are often a good option for first-time buyers. Get educated about topics such as predatory lending and fair housing laws. Make sure that you know your rights and are alert to anything that seems off.
“Learn about the areas and neighborhoods you are interested in buying. The Internet can be a great resource when home shopping. According to NAR, 77 percent of potential home buyers use the Internet to search for homes. Shop extensively and don’t limit yourself to just one neighborhood. In today’s market, you may be surprised at how much house you can realistically afford. Find a real estate agent that you trust and you feel represents your needs well.
“Deciding to become a homeowner is possibly the best resolution you can make, and one that will last long after future resolutions come and go. Find out what current homeowners already know. According to a recent nationwide survey, 69 percent of homeowners think of their home as their most valuable investment. By contrast, this was followed by 401(k) and other retirement accounts, with just 11 percent citing this as their top investment.
“With careful and thoughtful planning, you will be moving into your new home before you know it. If you have questions about the home buying process, contact the Spokane Home Builders Association at (509) 532-4990 or visit the National Association of Home Builders at www.nahb.org/timetobuy. To sign up for NAHB’s free consumer e-newsletter, visit www.nahb.org/housekeys.