It can happen when you least expect it: the opportunity youÃ¢â‚¬â„¢ve been thinking about for awhile suddenly opens up Ã¢â‚¬â€œ and you realize your time to become a homeowner has arrived!
Maybe the landlord of theÃ‚Â Lake Wallenpaupack homeÃ‚Â youÃ¢â‚¬â„¢ve been renting suddenly decides itÃ¢â‚¬â„¢s time to sell. Or, during a search for a rental, you happen upon a new local listing thatÃ¢â‚¬â„¢s such a bargain youÃ¢â‚¬â„¢d be crazy not to snap it up!Ã‚Â Life is always presenting unexpected opportunities to us and itÃ¢â‚¬â„¢s no different to the first time home. So, if you havenÃ¢â‚¬â„¢t prepared for this moment Ã¢â‚¬â€œ in advance Ã¢â‚¬â€œ you may well be disappointed.
Advance planning is the key to successful first time home buyers
Job One is to take very seriously the sometimes arbitrary-seeming Rules of the Road for credit scoring.Ã‚Â Ã‚Â Money MagazineÃ‚Â recently reported the average FICO credit score for denied conventional loan applicants was 729Ã¢â‚¬Â¦a pretty darn good score for anything else. The score on approved loans was 762 –Ã‚Â afterÃ‚Â an average 21% down payment!
Successful first-time buyers have kept their options open by lining up their ducks well in advance — completing at least two mandatory steps. So, if you havenÃ¢â‚¬â„¢t done so,Ã‚Â right nowÃ‚Â would be the appropriate time to start!
- Get your accounts in order. If it comes time to pull the trigger, every bank will look closely at every bank account you have. They look for Ã¢â‚¬Å“seasonedÃ¢â‚¬Â funds, meaning cash that has been on hand for at least three months (sometimes six), untouched.Ã‚Â Ã‚Â First time homebuyers will have established the total amount needed for a down payment — or have a clear trail of the origin of the assets they will sell to get it.
- Check your debt.Ã‚Â Banks are looking for a debt-to-income ratio of no more than 33%.Ã‚Â If you got a little too festive with your credit cards during last monthÃ¢â‚¬â„¢s holiday season, start paying down those balances.
Buying a first home is an exciting decision that can be as fun as it is stressful.Ã‚Â Having prepared in advance will accentuate the fun part, just as having the right agent by your side will, too.Ã‚Â Ã‚Â If and when the opportunity to become one of our local first-time buyers presents itselfÃ‚Â — or even if you have any questions about how to prepare — give me a call!