Buying a new home can be a daunting experience. First-time home buyers are often overwhelmed with new concepts such as financing, credit requirements, fees and costs. Home ownership requires a financial investment as well as a time investment. With these tips, we can help ease your home buying frustrations.
Build a strong credit history
The most important step in the home purchasing process is building a strong credit history. Knowing your credit background is such as important as finding the perfect home. The strength of your credit history allows you to secure favorable financing rates or qualify for incentives, terms or better financing rates. Credit can also determine the amount of money lenders will make available for your new home.
If you’ve been turned for credit in the past, you’re entitled to a free copy of your report. All three reporting agencies-Experian, Equifax, and Transunion- are required to provide a free copy of your report once every 12 months. To obtain your report, go to annualcreditreport.com, or call 1-877-322-8228.
Once you receive your reports, carefully look over the information. If you find incorrect data, you may dispute the information with the credit bureau. Do this by sending a letter to the agency. Submit copies of proof material if you have it. If the bureau determines the information is inaccurate, they have 30 days to remove the item(s) and send you a free updated copy of your report.
The Federal Trade Commission recommends that you send the agency a copy if your report with inaccurate items highlighted. Send it to the credit reporting agency via certified mail “return receipt requested”.
After disputed items are removed, make sure that you pay bills on time. The FTC also recommends having a mix of installment loans and credit cards to improve your score. Keep in mind, payment history and amount of debt are critical factors in determining creditworthiness.
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Prequalifying for a loan
Knowing how much house you can afford is an important step in the process. You can learn this information by prequalifying. Your realtor can put you in contact with preferred lenders who can provide invaluable information on interest rates and hidden costs such as closing fees, agent fees, home inspection and warranty charges.
Armed with your credit info, employment and salary history, the lender can prequalify you for a loan. This simply provides you with an estimated interest rate, and closing costs, lender requirements, and dollar amount maximum that you may qualify for. During this important step, the lender will also discuss any incentives offered by federal or state agencies. First-time buyers qualify for special financing or incentives in many areas.
Hire a Rock Star real estate agent
Real estate professionals are knowledgeable about housing trends in your local area. They are an invaluable tool to have when purchasing a home. A Realtor with experience in The Woodlands can guide you through the home buying process by showing you houses that fit your criteria; negotiating with sellers on your behalf; arranging viewings of potential homes; and educating you on your new neighborhood.
Agents are most often paid a percentage of the home’s closing sale price. Depending on the cost of the home, this fee amounts to a nominal fee when compared to the time savings you reap. When selling your home, a good Realtor markets the home and assists you in getting your home sold.
To read more about how to find the right real estate agent for you, click here.
The benefits of owning a home
Besides the security of owning a home, your house is also a good investment. Homeowners enjoy tax benefits beyond what is offered to non-homeowners. Tax credits can reduce your total tax bill or increase your refund according to the IRS. These tax benefits can be in the form of deductions on points paid at loan origination, mortgage interest paid at closing, property taxes or selling costs. All of these deductions can help you reduce your total tax bill. This can be seen in the lowering of taxes owed or a larger refund.
Homeowners may also be able to deduct home improvement loan interest or mortgage insurance premiums. Homeowners may also deduct a portion of their real estate taxes. Information about these valuable deductions and credits can be easily obtained from the IRS website or by contacting a tax professional.
Depending on economic conditions, your home may increase in value over time. This makes home ownership an important investment tool. In addition to the comfort and security of having a place to live, your home can become your largest financial asset.
The Rock Star Group is ready to guide you through the home buying process. Our team of professional Realtors and agents can educate you on obtaining financing, improving credit, and purchasing your new Alden Bridge Woodlands Home for sale. Contact The Rock Star Group at (281) 960-1900 to learn more about financing Alden Bridge Woodlands homes for sale.