Considering Buying a New Home in 2014?

Things to do before you start looking for a home

Many people think that since they pay their bills and have a good income, their credit report is probably "clean" and their credit "score" (known as their FICO Score) is excellent.

While this is very likely true, it's a good idea to get a recommendation from your Realtor for a good Lender and give them a call.  Like Realtors, Lenders are very willing to do a little preliminary work to create a relationship with you and perhaps earn your business down the road.  Here's what a lender can and will do for you:

  • Check your credit reports using a system which reports results from all three of the "bureaus" (TransUnion, Equifax and Experian).  Let's say you moved a couple of years ago and a medical bill never made it to your new address, or the guy you bought that car from at the "we finance" lot reported a missed payment to the bureaus?  There are many other situations that might have caused a "negative" on your credit reports.  Some of these can be resolved quickly, while others can take weeks, or months.  You won't be dealing wth an efficient (or quick) bureaucracy here, so it's good to know that your status with the credit bureaus is excellent before you start shopping for a home!  Problems on your credit report will often stop your home purchase, so don't wait until you're ready to buy to find out!
  • The Lender can explain your "ratios" of debt to income to you, and give you a reasonable sense of what sort of home you might want to purchase and how much you could borrow to meet those needs.  Once you know how much you CAN borrow, it makes a lot of sense to think through your lifestyle and how mucy of your income you want to devote to housing.  A large and exclusive home is critical to some people, while to others it's a place to sleep between sporting/social/travel/family events! 
  • A good lender can give you estimates of what your total monthly outlay will be -- in other words, how big is your monthly mortgage check (OK, electronic bank draft!) going to be, including likely escrows for insurance and property taxes.
  • If there's anything wrong with your credit report, a Lender can often tell you what to do to fix it.  If there's a LOT wrong, you may need a referral to acredit counselor.

Best of all, Lenders will do all of the above without any cost to you!  So, if you're thinking of buying a home in Louisville or the surrounding markets over the next year, now would be a great time to make contact with a trsutworthy Lender.  Call us for recommendations!  As with all professionals we recommend to you, no Lender pays us anything -- we only refer to service providers we believe will treat you like family!

Steve

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