I had a contract last spring but cancelled it b/c the bar exam and graduation was a little too much to deal with at the same time. At any rate, I have some tips.
YOU (not lenders, brokers, etc.) run your credit from each of the three major credit agencies and dispute anything that you think is wrong. Lenders and brokers that you talk to will say that they have to run your credit before discussing with you what you qualify but it's not true. All they need is your credit score (which will appear on the credit reports that you run) and your debt to income ratio and a couple of other pieces of info like how long you've been at your job.
if you run it, it won't hurt your score. if they run it, you have something like three times in a 30 day period to have it run but it will still drop your score a little. so be sure of who you want to go with *before* you let *them* run your credit. you can run your own at fico.com. also, some credit card companies offer a free report once a year (but you want to see all three b/c the information may vary oddly enough - mine did, and the scores did as well).
to find out who you want to go with, do research by calling around to different banks, lenders AND YOUR CREDIT UNION. credit unions often have the best rates and if you don't belong to one, join one for $5 and then you instantly have all of the benefits. ask about what their interest rates would be based on your credit score. you take the middle score, not the average of the three, the middle one is the one that they will use. albeit not terribly scientific and a bit random, that's the one that they use. if you're over 680, you qualify for the best rates (the same rates as anyone with 700 or above). if you've between 620 and 679 or so, you have middle-tier credit and will have a higher interest rate, etc. Just shop around. There are lots of first-time homebuyer programs, no money down programs, etc. Magic Johnson has a program through Washington Mutual for instance that allows folk with scores lower than 679 or 620 (one of the two) who purchase in economically depressed areas (that may or may not be being revived) to get some ok terms on the loan. A few percentage points in an interest rate can raise the mortgage payment (and the interest paid over the life of the loan) significantly so shop around, just like with buying a car or anything else and don't go with the lender located at a development that you may be looking at necessarily. They may not have the best deal and basically may be just preying on people who are either too lazy or not saavy enough to know that getting a loan is like anything else that one purchases and one must shop around.
Back to credit report: dispute anything that is negative also. The company has the burden of proving that you were late and often, even if you may have actually been late, the company won't bother to prove it and it gets removed. It's really as simple as that. You can dispute it over the telephone (you don't have to write letters), just call up Equifax, Transunion and Experian and get to disputing anything that is negative. The company has 30 or so days to respond and if, after that time, they do not prove that you were late, it comes off.
ETA: invest $500 and get a good real estate attorney. it's a small price to pay to ensure that all of your contingencies are in the contract and that your interests are being protected. anything that you want done to the place, have your atty put it into the contract as one of the contingencies for the deal to go through. that's the *only* way that you are even mildly guaranteed that the seller will do what the seller says (even if the seller is a developer). with a contingency clause, if it doesn't happen, you don't ahve to close and the atty should draft the clause such that you don't lose your earnest money either. also, have *your own* inspection done by a professional (even if it's a new property). don't rely on the builder's or seller's inspection b/c, again, you want someone who will be on your side telling you what's wrong with the place. also, even new developments have issues that come out in inspections, esp b/c many developers now are cheapskates that may or may not even been building houses for some time, and the place may not be up to code, or the foundation may be weak, etc. even though it looks nice. in a condo in one development that i was looking at for instance, my agent and i were walking the place and he found a hole under the carpet just by walking and bouncing up and down on an area of floor that he noticed "gave" a little too much when we walked on it...and this was a brand new gut rehab.
i talked to owners there (who had already purchased and moved in) and they said that they were trying to get the developer to come back and put in foam in the ceilings b/c they could listen to tv at their neighbor's house (while they were in their own house). again, a brand new gut rehab.
also, get your *own* agent and ensure that your agent is a "buyer's agent" NOT THE SELLER'S AGENT. They *have* to tell you if they are also repping the seller. You want someone who might be halfway impartial so get your own agent. And interview your agent. If your agent won't run comps for you (comparisons of what similar homes in the community have sold for - to give you an idea of a fair offer) then you have a lazy agent and push on. Also, if your agent is only doing it part time and actually has other employment too (trust me, I experienced this) push on.
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Originally posted by AKA2D '91
ttt
Any tips for potential home buyers?
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