There are many pitfalls you can avoid when you are in the market to buy a new home. Here are just a few tips and strategies to help you prepare for success:
Know your credit score. You may be able to get a better mortgage rate and more favorable loan terms by restructuring some of your balances on credit cards, car loans, etc. Certified Mortgage Planning Specialist professionals help you correct errors on your credit report and determine which balances to restructure or pay off in order to improve your credit score.
Know how much you can spend and determine how much you can afford. CMPS professionals can help you:
Finance your home based on your monthly payment comfort level
Determine how much cash to use as your down payment and where to get these funds
Understand your before and after-tax monthly payments
Restructure some other debt you may have to free up more monthly cash flow that enables you to improve your home buying budget
Don’t fall for someone else’s quick and magical prequalification that is complete within just a few minutes talking on the telephone. A CMPS professional does the needed work to insure the right information is known before generating any letter that may be used to lock you into a transaction. A true prequalification involves a borrower actually completing a loan application and having their credit report checked. Another thing to not fall for is to verbally give your social security number to anyone over the telephone. Without an application, it is not legal for anyone to pull your credit, so if someone just asks you for your social security number, move on to a professional that knows the law, and knows how to do things right.
Determine whether to rent or buy a home based on timeframe, budget and local market conditions. CMPS professionals help you run the numbers to determine if it is better for you to rent or buy a home based on your individual circumstances.
Don't be scared by "housing bubble" misinformation. For the last four years, the national media has been scaring potential home buyers with continuous chatter about a so-called "housing bubble". For the last four years, the national media has been wrong. It is always wise to base your decision to buy or not to buy on fact, not emotional hype. CMPS professionals help you evaluate conditions in your local real estate market to determine whether there is indeed a housing bubble" in your local market. The data they can evaluate for you includes: local housing inventory, local unemployment rate, speculation and other factors that can help you make intelligent choices about whether to buy a home.
Develop a strategy for financing your closing costs, home improvements and furniture expenses. A home purchase is a significant financial commitment. CMPS professionals help you understand the costs involved in home ownership and help you develop a financial strategy for dealing with these costs ahead of time.
Evaluate the mortgage products that will work best in your situation. Remember, it is far better to find a CMPS professional who can help you implement the best strategy with competitive interest rates than for you to shop for the lowest rate with the wrong strategy.
