New Year's Resolutions for Home Buyers
Every year since I started writing this column in 1993, I've offered
I start by recapping what's happened in the world of real estate and then move on to some specific resolutions I think will help buyers and sellers move the ball forward.
This year is, I'm sorry to say, has been lousy for the real estate industry in general:
-- Roughly 28 percent of homeowners are underwater or are nearly underwater with their mortgages, according to third-quarter 2010 data from
-- New home sales are at record low levels.
-- Home prices haven't moved much at all, and in some states are still declining.
-- The overall number of households has shrunk by millions.
-- Millions of homes have received foreclosure notices this year, and it's likely that 2 million homes will have been foreclosed on by the end of 2010.
-- Despite the lowest interest rates in history, millions of homeowners remain in financial jeopardy, unable to afford their payments and unable to refinance because of declining or negative equity in their homes.
-- The government's Making Home Affordable programs have been a disaster, with just 10 percent of applicants being granted a permanent loan modification. In some cases, the loan modifications have increased payments for homeowners, further jeopardizing their homeownership.
-- The shadow inventory of homes is growing and may eventually reach another 4 to 12 million foreclosures, depending on how quickly unemployment comes down.
-- Federal Reserve Chairman
-- There's still no consensus on what to do about
This isn't a particularly happy state of affairs. And yet, hope blooms eternal. So here are a few
1. Pull a copy of your credit history and credit score. Mortgage lenders have become extremely conservative and restrictive in deciding which mortgages will get funded. Lenders will pull credit scores from each of the three credit reporting bureaus,
2. Practice good credit behavior. Lenders regard those borrowers with a credit score above 780 as their best borrowers. Unless your credit score is above that level, you should work on eliminating any errors, and practicing good credit behavior so that your credit score rises. The best thing you can do? Pay your bills on time and in full each month. The next best thing you can do is maintain four open and active lines of credit. Each credit reporting bureau offers good credit behavior tips for free on its website, or you can go to MyFico.com, which is the consumer-facing credit site owned by
3. Shop around for the best loan. Even though the federal government is backing more than 90 percent of all the loans through
4. Create a great home buying team. Whether you're buying investment property or a home to live in, you'll want to create a team of real estate professionals who can help you find the right property, at the right price, on the best terms, without any headaches. Home buyers will want their team to include a great real estate agent, mortgage lender, real estate attorney, tax preparer (with experience in investment real estate if you plan on buying real estate as an investment), and real estate inspector to start. Residential real estate investors will want to add a 1031 exchange professional and commercial (if appropriate) inspector to the mix.
Having the right team in place will go a long way toward making your dream of homeownership come true.
- New Year's Resolutions for Home Buyers
- Decoding the FICO 8 and FICO 8 Mortgage Score
- Why It's Time to Reconsider House-Hunting
- Jobs and Real Estate Tethered for Better or Worse
- Not Wise to Order Your Own Appraisal Before Refinance
- Foreclosure Process In Deep Crisis; Is Government Finally Noticing?
- How Much Should You Pay to Refinance?
- Interest Rates Drop Again But Will Housing Market Perk Up?
- On Sale: Retirement Havens
- Appraisal Problems Kill Opportunity For Lower Mortgage Rate
- Our Big Fat Foreclosure Mess
- What to Expect When You're Closing on Your Mortgage Loan
- Shopping for a Home When There's Too Much to Buy
- Finding Second Home Bargains
- America's 10 Slowest Appreciating Housing Markets
- The Costs of Retiring with a Mortgage
- Prepaying a Mortgage: When Does It Maske Sense
- Shorter-Term Mortgages Make Sense for Some
- Thinking About Refinancing? Get Moving
- 10 Historic Places to Retire
- Do You Live in a High-Debt City?
- How to Get a Government-Backed, Zero-Down-Payment Mortgage
- Housing Demand Evaporates As Stimulus Ends
- Home Prices Likely to Slide After Sales Plummet
- 9 Reasons to Choose a New Home Over a Resale
- What will happen to the housing market?
- Pay Off Investment Property or Pay Off Primary Residence?
- 9 Smart Ways to Come Up with Down-Payment Cash
- More Federal Help for Struggling Homeowners
- Home Builders Not Driving Economic Recovery
- Packing for a Move Is an Art Unto Itself
- An Expert Looks at the Future Of Real Estate
- How Financial Reform Affects Home Buyers
- 10 Best Places to Reinvent Your Life in Retirement
- Housing Market Takes Another Step Backwards
- When Buying Distressed Property Know All Liabilities That Come With It
- 3 Ways to Invest in the Real Estate Rally
- Will the REITs Rally Continue?
Real Estate - New Year's Resolutions for Home Buyers
(c) 2010 Ilyce R. Glink. DISTRIBUTED BY TRIBUNE MEDIA SERVICES, INC.