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Preparing to buy a home offseason

Ginger Dean

January 17, 2013

By: Ginger Dean, Home Finance Specialist

In: Finance and Legal

You may be thinking that it's best to wait until you're actually ready to hit the pavement before you prepare for the house hunt. Hold that thought! Buying a home is a very involved process with several moving parts. Ideally you want the process to function like a well-oiled machine and if you wait until the last minute then you risk the possibility of costly surprises down the line.

Let's take a look at three things you should be doing to avoid surprises:

1. Check your credit

You've heard this before, and I'm here to drill the point home again. Check your credit and make sure that you're looking at the same reports that the lenders do. Are they using FICO or Vantage? Ask before you start the process. Each scoring model has it's own formula and you want to be on the same page as far as what the lenders are looking at on your credit report. One lender may require a 650 credit score through FICO but if you are looking at a Vantage-based report with a 700 when the FICO says 630 then your out of luck.

Check for old bills that may pop up while you're in the pre-approval process. Typically, while you're busy shopping your credit around, old creditors are notified during that process that you're shopping around. Since they know that you'll be eager to clear any unpaid debts, they slap your credit report with that old utility bill you forgot to pay, which then dings your score significantly, forcing you to pay up. Clearing that up can be a tedious process in and of itself, so it's likely to detour your timeline. This is why it's important to start early.

2. Determine where you want to live

Explore neighborhoods and visit them at different times of the day. Talk to neighbors about how they like the surroundings and their experiences with crime, school quality and any other important issues. If there's an HOA, you may want to ask them about their experiences as having an HOA that doesn't function in the best interest of owners can be a nightmare.

Check the local crime statistics and explore the areas within a 2-5 mile radius of where you want to live. Check to see if the areas are consistent or whether they are more "run down" as you venture into certain areas.

3. Shop for a Realtor

This choice can make or break your experience. Ideally, your Realtor should be experienced and knowledgeable, especially if you're a first time home buyer. Interview Realtors and get recommendations from friends, family members or coworkers. Social media can be a good place to start because Realtors who are invested in their reputation and have the experience to back it up have taken advantage of this medium to let you know.

Hopefully, these tips can help you gauge where you should begin in the home buying process. It is involved, but with proper planning you can work to have a smooth process with few hiccups.

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