Are You Ready to Buy a Home?

by Sherry Holetzky | More from this Blogger

14 Mar 2007 10:23 AM

So, you're thinking about buying a house. Congratulations. Buying a home can be a very exciting experience. The process can also be rather stressful, especially if you are unprepared. There are a few things you need to know and do in order to make the process simpler.

Start by getting a copy of your credit report a few months before you actually start looking for a home. Make sure that everything on your credit report is correct and then check your credit score. If you're looking at it for the first time, it may not mean much to you.

All creditors and lenders are different, but if your score is lower than 650, you should probably consider repairing your credit before attempting to secure a mortgage. If you decide to hire a company to help you repair your credit, research the company thoroughly to make sure it is legitimate.

If your credit score is around 650, you may still be able to secure financing. You should however be aware that your interest rate will be higher, by quite a bit, if you have a low credit score. You should seriously consider holding off on a home purchase until you can establish a better credit score if necessary. You'll be glad you did so in the long run, because a high interest rate means that you will end up paying tens of thousands (or more) beyond the purchase price for your home in the long term.

Also, don't get too excited about "teaser" rates, which are very low interest rates offered on variable rate mortgages. They sound good now, but as interest rates rise, so will your rate as well as your house payment. You could find yourself paying hundreds of dollars more each month with very little notice. For families who don't have a lot of savings or much disposable income, this can become problematic. Some families even end up losing their houses, so make sure you are well prepared before you decide to purchase a home and research mortgage options carefully.

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Learn more about Sherry Holetzky

Sherry Holetzky is a work at home mom and freelance writer. Married to her best friend, Sherry and her husband are raising their family in a quiet rural setting in the beautiful Ozark Mountains.

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