The Best Advice Ever

If one of your goals this year is to make the shift from renter to homeowner, you should begin preparations now for one of the biggest life decisions you will make.

Before you start the home-buying process, make sure you are ready to buy a home that you will live in for at least three to four years. It will take that long to build enough equity to recoup your investment costs. Its ok to imagine a "dream" home or a your "dream" location, but keep in mind that you may need to sift through these dreams to find a community and a home that you can comfortably afford.


Anyone who has watched the news in the past few years can attest that home prices have fallen in most real estate markets, and that interest rates are at historically low levels — both factors that make buying your first home more affordable.

Meet with a lender

Get pre-qualified for a mortgage loan before you look at homes so you can avoid falling in love with a home you cannot afford. You may be surprised to discover you can afford something pricier than you thought since interest rates are so low. Make sure you ask your lender about how much cash you will need for a down payment and closing costs as well as various loan options.

Check your credit score

Lenders base your mortgage qualification on a variety of factors, including your income and assets, your debt-to-income ratio, your savings history and your job stability. But the most important factor is your credit score. Lenders tie the interest rate you must pay to your credit score, so that borrowers with a score of 720 and sometimes 740 and above are the only ones who will pay the lowest mortgage rates. Borrowers with a credit score below 620 may not qualify at all for a mortgage until they can improve their score.

Make a reasonable offer

If you love a house and don't want to lose it, don't make a low-ball offer. Some sellers are willing to negotiate and others are not. A trustworthy realtor can walk you through the process to make sure you are dealt with fairly.

Have a home inspection

Never buy a home without having it inspected. Not only are you looking for serious flaws in the home, but you can learn a lot about what to expect in terms of repairing or replacing systems and appliances as an owner. Let me go one step further. Its great that your Dad's boss has a son who dates a girl who took a plumming class...once. Get a PROFESSIONAL home inspector. Period.