Realtors Offer Tips for Home Buyers

EDISON — From a consumer perspective, today’s real estate market can be summed up with one word – confusing.
Headlines point to an unstable economy, unemployment and a foreclosure crisis, leaving consumers in a panic with little information to assist them in making housing decisions. On the other hand, historic lows in federal interest rates make buying now advantageous for those on a solid financial footing.
Despite the ongoing debate, the best approach for prospective buyers to make a good decision is to do their homework ahead of time, no matter the state of the market.
Yes, purchasing a home can be overwhelming and intimidating, but there are some steps you can take to make the process gratifying. The essential steps to take before starting the home buying process are to plan ahead and be prepared; the house you eventually purchase will someday be the site of hundreds of precious memories.
“For financially-capable buyers there’s no reason not to buy a home now,” said NJAR® 2010 President Judy Appleby. “Prices are more stable this year than they were last year and interest rates are still at record lows. There are many options available to potential buyers whether it’s regarding mortgage programs or interest rates.
It’s just important not to feel daunted by the options available and to consult with a REALTOR® about the market you are considering.”
To assist prospective home buyers to meet the current challenges of the market, the New Jersey Association of REALTORS® (NJAR®) has assembled a set of tips that consumers are encouraged to consider before they take the first step to find a home:
Get your credit report – Your credit history is an important factor that affects your ability to obtain a mortgage for the purchase of your home.
If your score is less than desirable, you can work towards building or repairing your credit by working with a Department of Housing and Urban Development-certified counselor. For more information, visit www.hud.gov
Investigate interest rates – Now is a great time to buy a home, especially because interest rates are at record lows that are certain not to last. If you buy a home with a loan at today’s rates, you could end up saving thousands as compared to waiting and settling for a loan at a greater rate.
Save – The more money you save now, the less you’ll pay later. You can use your savings for a large down payment on a home, which will reduce your mortgage payments. Having a healthy savings will also make you more attractive to lenders. If you can’t put a large percentage of money down, don’t worry. There are many mortgage products available with different down payment requirements. You can choose one that is right for you.
Explore government mortgage products – There are numerous loan programs available from local, state and the federal government for many different home buyers. The New Jersey Housing and Mortgage Finance Agency offers programs to first-time buyers, buyers who move near their place of work, police and firemen, and buyers who move into designated Smart Growth areas.
For more information, visit http://www.state.nj.us/dca/hmfa/consu/buyers/ownprg/ or contact a REALTOR®.
You may also want to consider federally-backed mortgages from the Federal Housing Administration. Federally-backed mortgages are more likely to accept applicants with variable credit histories and they boast competitive rates with low down-payment requirements.
Get Pre-Qualified – Before you begin your search, you can find out how much a mortgage lender would be willing to loan you for a home. Often, you may hear the expressions “pre-qualified” and/or “pre-approved,” and it is important to understand the difference between these terms.
Pre-qualified, the term that dictates how much home you can afford, means that you would qualify for a mortgage but it does not guarantee you a mortgage or a rate.
Being pre-qualified is useful in the negotiating process because it will give the seller confidence that you’ll be able to get a mortgage once the time comes. Pre-approved, on the other hand, guarantees you a mortgage at a specified rate. Speak to your REALTOR® for referrals to lenders who can begin your pre-approval process.
Research, Research, Research – Find out what your preferences are by researching your desired neighborhood and type of home. Talk to your REALTOR® or check out www.REALstoryNJ.com