Dorota Dyman Associates Tips for first-time homebuyers
The market can be tough for first-time buyers so with the spring homebuying season now in full swing (March through June are the year’s four busiest months), here are some tips for first-time homebuyers.
With two daughters and a baby on the way, Carlos and Cinthya Jijon decided last year to buy a house for about the same monthly cost as a bigger apartment. But they couldn’t find a home.
Supply was tight. And investors armed with fistfuls of cash outbid them every time.
This month, however, the Jijons are unpacking, settling into a one-story house in Buena Park, Calif. The auto-parts deliveryman and the nurse made the transition from renters to first-time homebuyers.
The market is tough for first-time buyers such as the Jijons, and statistics show the number of first-timers is falling.
But the Jijons persevered, taking an eight-hour homebuying course, learning about cash-assistance programs, and getting loads of practical advice. They beat the odds.
With the spring homebuying season now in full swing (March through June are the year’s four busiest months), here are some tips for first-time homebuyers.
Determine what you can afford. The first step is to meet with a lender, review your finances and find out how much you can afford to spend on a home and how much you have for your down payment.
“If they qualify for a $300,000 house, they shouldn’t be wasting their time looking at a $500,000 house,” says Maritza Reyna, an education manager at Consumer Credit Counseling Service.
Experts also warn not to shop for the most expensive home you qualify for, unless you truly can live with the payment that comes with it.
Shop for a mortgage. Don’t use whatever lender your agent recommends without doing some independent shopping, says former loan processor and author Carolyn Warren.
Another classic mistake: calling 10 lenders and asking for their interest rates. A lender can’t be held to those quotes, so “it’s just going to lead you to the smoothest-talking liar,” says Warren, author of “Homebuyer Beware” and another book on mortgage rip-offs.
She says it’s better to look up mortgage rates online, then call three or four lenders and mortgage brokers and ask them for a written list showing their fees.
“The lowest rate is no good if you’re paying too much in fees,” Warren says.
Check for down-payment assistance. Before you shop, check to see if you qualify for one of the down-payment assistance programs.
“Don’t assume your income is too high,” says Karla Lopez del Rio of NeighborWorks Orange County, a housing assistance agency. “These special programs, no one’s going to tell you about it if you don’t seek it out.”
Get preapproved. Getting a lender to preapprove a loan before you shop can make your offers more attractive, while avoiding deals falling apart because loans don’t get approved during escrow.
Get all the documentation you’ll need for the loan process — W2s, tax returns, pay stubs, bank account statements. Find out from your lender exactly what you’ll need.
And go to AnnualCreditReport.com to get your free credit reports from all three major credit agencies. If necessary, follow the steps for correcting errors or repairing your credit.
Pick an agent who’s right for you. Get referrals for agents from friends and family, then talk to each one. Look for someone with whom you can communicate.
Read full article at The Seattle Times