Happy Home Hunting

The median home price in the U.S. continues to creep higher in 2014. The number of homes for sale has been growing, as well.  What does that mean for house hunters? Simple. Now is a good time to shop for a new abode.

For those of you inexperienced in the world of mortgages, we have compiled some pointers that should help you avoid some real estate land mines.

       Focus on your credit

The biggest factor in your purchase power is your credit score. If you have a strong credit score, you will want to keep it that way. Do not make too many major purchases as you prepare to buy a new home. This could negatively affect your credit score. If your credit score is not so stellar, spend the months prior to home shopping whittling down your debt-to-income ratio. In other words -- pay off your bills and credit cards as much as possible.

     Get pre-approved

Take the time to visit your local AltaOne Member Service Center and ask about a pre-approval. This is an important step in the home shopping process. It determines how much your financial institution will lend you. During the pre-approval process, your credit union reviews all your financial information and determines how much of a mortgage you can afford. The pre-approval process saves you time and allows you to focus only on the homes you can afford.

·         Draw the lines

You would be surprised how frequently border disputes arise because neighbors do not know their property lines. Accurate property lines may also save you money on your property taxes.

·         The best time to buy 

Interest rates rise and fall. Property values skyrocket and plummet. There is never a perfect time to buy ... on second thought ... there is a perfect time to buy -- when you are ready. Stop hemming and hawing and trying to predict the market trends. When it makes sense for you and your family, then it is a good time to buy.

·         Save up for the down payment

There are several benefits to making a down payment of 20% or more. First off, you will not have to pay PMI (private mortgage insurance) if you put down at least 20%. PMI provides insurance to your lender in case of default. Lenders look more favorably at borrowers who provide higher down payments. In addition, if you make a 20% down payment, then you instantly have 20% equity in your new home.

·         Find an agent

Every city boasts and abundance of realtors. It is important to conduct your homework and find a quality, experienced realtor who is going to represent your needs.

·         What's it worth? 

An appraisal determines the market value of the home. Lenders use appraisals to help determine the loan amount. Consumers have a legal right to obtain a copy of the home's appraisal.

·         Check the foundation 

A home may look squeaky clean and brand new -- but the structure may not be sound. In California, earthquakes may have caused cracks in structural beams. Termites, water leaks and other hazards often cause hidden damage. A thorough inspection by a reputable firm is an important element to the home buying process.

·         Let the negotiations begin 

Your agent will help to recommend offers. Be fair. Base the offer on comparable home sales in the neighborhood, the condition of the home, extras such as a pool, etc. Remember, the sellers probably want to sell the house as much as you want to buy it.

There are many more aspects of home buying to consider, such as homeowners insurance, the local schools and much more.

Good luck -- and happy home hunting.

(Every new mortgage and HELOC funded through AltaOne Federal Credit Union through November 14, 2014 qualifies for the Imagine Sweepstakes and could win a year's worth of mortgage payments!)

Categories: