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If there were only two critical issues you face as a first time home buyer (we could only hope this were the case), these would be your “must” list. The first only indirectly involves your first mortgage, but should be your top priority. Actually it is known as the “first three rules” of real estate: Location! Location! Location! The structure you purchase is not nearly as important financially as the dirt upon which it sits. As a first time home buyer, you might believe your first choice is to buy in your parent's, family's, or even your friend's neighborhood. This may, in fact, be your best choice or it could project future financial problems. The acknowledged quality of a location, not an individual home, is the most important factor in your real estate decision and will either improve or hurt both your quality of life while you own the property and could seriously hurt your selling price when you're ready to move on. From the mortgage perspective, all mortgage lenders are aware of the security of having mortgages on properties in desirable locations as well as the potential problems they may encounter with properties in a less than popular area.
The second critical component is your personal financial condition. Often, first time home buyers load up with short term debt (credit card and automobile loans) before they attempt to buy their first home and get their first mortgage. As all experienced mortgage professionals will advise: Buy your new auto(s) after you've bought your first home! Pushing your unsecured credit (plastic cards) to the maximum and/or buying one or more new cars before you get your first mortgage will almost always force you to remain a renter, paying someone else's mortgage for years to come. You simply will not qualify for a sufficient mortgage to purchase the home you want. Even the best first time home buyer mortgage programs cannot solve the problem of too high a current debt level to approve the mortgage you need to complete this first major purchase. Regardless of your debt level, make sure you make all required payments on time to keep your credit report and score in a range (preferably 650-750) to qualify you for the lowest interest rate available.
|Sheri Ann Richerson|