8 MUST KNOW tips for First Time "Wanna Be" Homebuyers!

There are a lot of things to mention in this category, but when it gets down to it. In order of importance here are 8 things to do when you are even THINKING about purchasing a home for the first time.

1. Make sure you have paid all of your bills on time in the last 12 months or more, if not on time, no more than 1 or 2 - 30 day "lates" in a 12 month period. It is possible to have dinged credit and still get a mortgage, but if you are having issues just keeping up on your bills, that might be a good sign to wait until you have them under control.
2. Have at least 3 good "trade" lines of credit - They include car loans, credit cards (secured or unsecured) , Gas Cards, Department Store Cards, Cell Phones, and even in a pinch your utility bills
3. Save up at least a 3% down payment, as having that cash in reserve may not be mandatory to close, but it will be needed for about 95% of the good mortgage programs around today.
4. Do not have any large unexplained deposits in your checking or savings accounts, as it will look like a loan has taken place and most underwriters will want an explanation letter about each one.
5. Analyze a realistic payment zone for you before you meet with a lender. Reason - Most lenders will want to qualify you for the highest possible mortgage, and history has shown the industry that much of the time that the allure of the bigger home can intoxicate, even the most conservative buyers. & You don't want to be strapping yourself down with too much mortgage debt, which is really un-needed stress!
6. Talk to at least 2 local mortgage lenders, ask for referrals from trusted sources, and avoid using internet loan companies if possible, as in my opinion, they have a history of overpromising on rates and terms.
7. Choose a competent real estate agent, not always a real close friend, or relative. It may be easier to look at them during a Holiday dinner, but they should be experienced in the business, not just available.
8. Don't choose an agent based only on what they charge, or "kick-back" to you. The greater the discount offered, the greater the chance that they are making up for some other limitation in their skill set, such as good negotiation skills in your purchase, which could easily cost you thousands MORE than you might save...

The above are my opinions and observations based on 23+ years in residential sales, 16 years of instructing 38,000 real estate students in continuing education classes throughout the state of Minnesota & authoring 7 different books on real estate matters, including "Pitfalls and Windfalls of First Time Homebuyers.  

P.S. Feel free to write me, if you would like me to blog more about any of these subjects, or something I might have missed!