Despite the low inventory in some areas of the country and tight lending regulations, now is a great time to buy your first home! Buying a home is one of the single best things you can possibly do for your financial future, and in most states buying is significantly cheaper than renting.
We've compiled a list of things to take into consideration, starting one year out.
THE HOME BUYING CHECKLIST
12 months in advance
Make sure the time is right. Use Trulia.com's rent or buy calculator to see if you'd really come out ahead, based on loan rates, taxes, and where rents and prices are headed in your area. Nationwide it's 38% cheaper buying vs. renting.
Clean up your act. Devote this year to saving money and paying down debt. You'll need at least 3.5% down for an FHA loan, or 10% to 20% for a conventional mortgage. Lenders also like to see job stability, so settle in for now.
Learn what you like. When a home catches your eye -- a listing, say, or a photo -- pin it to a board on Pinterest. Or try Swipe, a new app from the site Doorsteps, which lets you browse listing photos and mark them pass or save.
Six months in advance
Look better to lenders. To boost your credit score, order your free credit reports at annualcreditreport.com and fix any mistakes. Pay bills on time, chip away at credit card balances, avoid new debt, and don't close any accounts or apply for new credit. The average credit score for approved mortgage applicants is 755.
Figure out what you can buy. Use an online calculator like the one at Zillow.com to estimate how much house you can afford based on your income, savings, and debts. That'll help you research homes and drill down on costs.
Forecast future bills. With an idea of how big a house you can buy, you can do a more detailed budget. Scan listings for property taxes on homes you like. Get a homeowners insurance quote at Insweb.com. Call local utility companies for the typical bills. And tack on 1% of the home's value for yearly maintenance.
Three months in advance
Pick your loan. Fixed mortgage rates, now 4.4%, may edge up to 5% this year, forecasts HSH.com. If you are confident this is a starter home, you can save with a 7/1 adjustable-rate loan, now 3.5%. The risk: You end up staying longer than seven years and rates rise sharply. Most -- 92% of mortgage borrowers -- opt for fixed-rate loans.
Prove you're a serious shopper. Based on your income and credit, a bank will give you a mortgage pre-approval. "It's the No. 1 thing you want in your back pocket when you go shopping," says Svenja Gudell, an economist with Zillow.
Find a guide. Look for a realtor who has worked in the neighborhood where you hope to live. And in a tight market like today's, ask candidates what their strategies are for unearthing listings and handling potential bidding wars.
There you have it! The first time home buyer's checklist, straight from the experts :) If you're looking for a property in the Las Vegas area, don't hesitate to contact us at 702.796.4790! We'd be happy to answer any questions you have.
Happy home buying!