Buying Tips

by kenlavertu on May 3, 2012

in Featured, Home Buying Tips, Latest News

I’ve posted a lot of info helping sellers, but buyers should understand several keys before wading into the market. And this is not just for first-time home buyers, even second- and third-time home buyers make common mistakes.

  • The Down-Payment Matters 

Long gone are the days are the days of easy access to 1% down FHA loans or other creative loans with built-in interest rate escalators. That’s not to say these loans have been eliminated altogether, but that qualification for them is so much more stringent. Banks now prefer traditional amortization schedules with a traditional 20% down-payment. Buyers should look at this positively. 20% down will not only lower their monthly payments, qualify them for lower interest rates, and give them immediate equity, but will save them from PMI (private mortgage insurance). Having to pay PMI is like driving down the interstate tossing $20 bills out the window! So try to avoid it.

  • The Credit-Score Matters

The lesson here is not to pile up a huge amount of unsecured credit-card debt so that you can have a higher credit score, but to monitor your score regularly. A huge number of people have false negatives that should have been attributed to someone living half the country away. Clearing false negatives can take up to 90 days, so be sure that you explore your credit score through truly free agencies like creditkarma.com before you discover that dream home. Otherwise, false negatives could cost you hundreds annually because of a higher interest rate.

Check back next week for more tips on home buying. If you’re curious whether it’s time for you to buy or not, give me a call. I promise an honest assessment of your financial situation – I’m not here just to collect an easy commission. I want what’s best for you and your’s.

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Post by Ken Lavertu

Ken has written 31 articles.

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