The First Step in Buying a Home-YOUR CREDIT REPORT!

All too often I am approached by a prospective home buyer who asks to look at a home they have fallen in love with only to have them end up in the situation where they can't get the home. The culprit....the dreaded credit report!!

The first step that a buyer should take when beginning the search for a home, before they talk to a Realtor, before they talk to a lender, even before they think of pulling up CENTURY21.com or Realtor.com, they should pull up their credit report. Consumers have the ability to pull up a free credit report online through sites such as FreeCreditReport.com and should do just that.

I recently read that over 70% of consumers reported that they have found errors in their credit report, with 25% of them being serious enough to either deny the consumer credit or significantly delay the process. With over 54 billion credit updates annually, it is very likely that you may have an error on your credit that you are not aware of. Many times these errors are negatively impacting your credit in such a manner as to deny your ability to get credit or to cause you to pay excessive interest expenses.

All consumers should routinely pull their credit reports to look for errors and have them correctly immediately. They need to be proactive in protecting their credit and become educated and understand how credit works. When a questionable activity is identified, it needs to be correctly immediately. Usually the first step in doing so is to notify the applicable credit reporting bureau.

If you are wanting to buy a home, do this and then call me to help you find that perfect home. If you have questions regarding your credit, contact me and I will help you answer them.

What's the Latest with West Wood?

We're all curious as to what the market is doing in our neighborhood. The latest information for West Wood is very positive! Two homes have sold in the neighborhood since January 1st of this year. One on Durden Court and the other on Benoit Drive. So welcome your new neighbors if you live near them!

Statistically, the average sales price of these homes was $121,950 with a price per square foot of $70.63. This is an increase over the total sales price per square foot for 2008 of $68.84. So for the first quarter of 2009 things seem to be looking up for us in terms of home values.

Currently there are 9 homes on the market ranging in sales price from $119,900 to $170,000. These homes range from 1480 sq. ft. to 2356 sq. ft. with an average price per square foot of $78.16. If you know of someone looking for a home, please tell them about our neighborhood. If you like living here, don't you think yours friends would also?

I personally feel that we are making some progress in getting our home values up. For a time we seemed plagued with a lot of foreclosed homes in the neighborhood and that trend has seemed to decrease. Most of these homes currently on the market are being sold by the home owner and do not represent bank owned properties. That is GREAT news for us as a community!! In order to keep our property values up, we need to lessen the number of foreclosures in our neighborhood.

Yeah, we all agree to that and I'm sure you're saying what can I do? I pay my bills but it's my neighbors who are causing the problem. Well, there is plenty you can do. If you know of a neighbor, or anyone for that matter, who is having difficult paying their mortgage or maybe has just lost their job, urge them to contact their lender IMMEDIATELY!!! There is a lot that can be done to keep that family in their home.

When the homeowner contacts the lender ask to speak to the home retention or workout department. Be firm and insist that you need help and that you run the risk of foreclosure and you want to work out a deal to keep you in your home. Lenders have the ability to restructure the loan any way they see fit and should be able to work out a plan to keep you in your home. The recent government acts have provided money to help lenders restructure loans to keep homeowners from losing their homes. Call your lender today if you have lost your job or are having difficulty paying your mortgage! Be proactive, don't wait to talk to them when they call you!

We can all do our part to help our neighborhood and our community. If you, or someone you know is in trouble, talk to them and have them take action. If you have any questions or need the number for your lender, please contact me. I'd love to help you keep your home!

Why Pricing Is So Important

Trying to value a home to sell in any market is confusing for most sellers. In this market it is even more crucial. A colleague of mine, Greg Cooper, tells us why pricing is so important.

Downpayment-How Much?

Once you've found the home of your dreams, you'll be faced with financial decisions. Even though you have been pre-qualified, the amount of down payment will be your first consideration.
How much should you put down? And how does the amount affect your mortgage? Should you put down the least amount required, or as much as possible? The following are some tips and information you may find helpful in making the right decision for you.

Of course, you are always dependent on your specific financial situation. Very often first-time buyers are scraping together every available cent to make the minimum down payment. They may consider themselves fortunate to be able to do just that.

If you have more cash available, there are two ways to go. Some experts feel that you should make the smallest down payment that's acceptable to your lender. You will then have cash for emergencies, decorating, and any renovation that you want to do right away. You could also invest the extra funds. Weigh your options in dollars and cents. If you're trying to decide between putting 15 percent versus 20 percent down, and that difference is $5000, go with the 20 percent. You'll then save the cost of the PMI (Private Mortgage Insurance) which can really add up.

Generally, a 20% down payment is thought to be standard. If your home costs $100,000, you would be expected to come up with $20,000 in cash for the down payment, in addition to the closing costs. Many lenders believe that 20% down gives the homeowner a larger equity stake in the property, and thus decreases the likelihood of default.

Lenders today recognize that 20% of the purchase price is a great deal for most first-time buyers. As a result, different mortgage options have been developed to require a smaller down payment. For example, there are several mortgage options that will allow you to put down 10-15 percent. Conventional lenders will allow a smaller down payment if you agree to purchase private mortgage insurance. This insurance is paid monthly, along with your mortgage, until you have earned at least 20% equity in your property.

An FHA loan will require 3.5%-5% down. If you put down 3.5 percent, the FHA will accept a Community Development Block Grant, if one is available and you meet the guidelines, to make up the two percent difference.

A loan from the Veterans' Administration (VA) doesn't require any down payment. These loans are offered at a fixed rate that is set by the government, and the fees are low. These loans are available to honorably discharged veterans of the United States Armed Forces.

On the other hand, there is the argument that the more you put down, the less you pay back. The less the mortgage that you'll take and the less interest you'll end up paying. A greater down payment may eliminate the cost of private mortgage insurance. Talk to your lender, and run the numbers on a variety of scenarios. Then you can proceed in the manner that best serves you.

Copyright PropertySource Network 2009