Why You Should Plan Now to Buy a New Home in Frisco in 2014
Are you planning to buy a new home in Frisco in 2014? Buying a home is a complicated process, and it can be especially daunting for first-timers. It’s important to get your finances in order before you even start shopping for a home. Ideally, you should start planning a year ahead of time, but you can do the following steps over a shorter time period if necessary:
12 months out (or as soon as possible):
Obtain your credit report & FICO score, and improve it if necessary. Get a free credit report from AnnualCreditReport.com and check it for errors such as accounts that aren’t yours, collection accounts for debts you don’t owe and negative marks. If there are any problems with the report, you may not be able to secure a home loan at all or you could pay a higher interest rate on your mortgage.
Pay down debt and start saving. You don’t have to pay off student loans or car loans before getting a mortgage. But if you have toxic credit card debt and payday loans, that’s a sign you’re living beyond your means. Stop overspending, cut out unnecessary expenses and start saving as much money as possible.
Set up automatic bill payments. A single 30-day late payment can knock 100 points off your credit score, and take many months to recover. If you don’t have a reliable bill payment system in place, consider using automatic debits from your checking account, or an online bill payment system’s recurring payment feature.
6 months out:
Review mortgage options. Don’t risk losing your home because you didn’t understand your mortgage loan terms. Do your homework about the different types of home loans available. A traditional, fixed-rate mortgage is still one of the best options. But if you can’t commit to a 30-year loan, at least use a hybrid version with a rate that’s fixed for as long as you plan to own the home.
Research costs of home ownership. Be aware of all the costs of buying a home. A mortgage loan is just the start. There are also property taxes, insurance and possibly home owners’ association fees to pay. If you’re buying an older home, you’ll need to budget for maintenance and repair costs.
Adjust your savings plan. Once you’ve determined the housing costs, you may need to re-think your saving strategy. A larger down payment could allow you to buy a bigger home, or lower your mortgage payment. You may also want to build up an emergency fund to handle unexpected home expenses.
3 months out:
Mind your credit. Your FICO score is affected by how much credit you’re using. Try to keep credit card balances below 30 percent or even lower. And don’t open or close any credit card accounts.
2 months out:
Shop mortgage loan rates. Check your FICO credit score again, and talk with mortgage lenders about what interest rates you might quality for. Don’t apply yet or give permission for your credit to be pulled; you just want to learn what you can expect.
Get pre-approved. Obtaining pre-approval for a mortgage loan puts you in a stronger position with sellers, and will speed the loan approval process along once you have made an offer on a house.
Consider a mortgage broker. If you’re not comfortable shopping for a mortgage loan on your own, seek out the services of an experienced, ethical mortgage broker. Get referrals from family and friends, as well as the National Association of Mortgage Brokers.
Research neighborhoods and look for an agent. Now you can finally start shopping for your dream home. Check Internet listings, attend open houses and find an experienced realtor to help you refine what you’re seeking.
Once you’ve found a new home and made an offer, you can start shopping for a mortgage loan. Keep in mind that you’ll need to move fairly quickly to secure the loan, since the full approval process typically takes four to six weeks. You should also arrange for an appraisal, home inspection and walk-through on your new home; get homeowners insurance and confirm how much money you’ll need at closing. This can include your down payment and share of legal fees, paperwork costs, property taxes and title insurance.
One community you should consider for your new home in Frisco is Austin Ridge at Lone Star Ranch. This master planned community offers a variety of amenities including a clubhouse that can be rented for private parties, a fully-stocked fishing pond, workout facility, and a resort-style swimming pool with slides for the kids. Visit the Landon Homes website and view the floorplans that are available to build at Austin Ridge.
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