How to Reduce the Stress of Buying a Home in Today's Economy

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How to reduce the stress of buying a home in today's economy
2 years ago
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Many people wishing to become homeowners in today's economy are faced with a double-edged sword. There are so many great properties available, many lower than market value, during this time. The number of foreclosures available is also quite high. However, being able to secure a home loan during this recession to purchase one of these homes may be more complex than ever, as banks and other lending institutions have become very nervous about who they will fund loans for. If you prepare yourself before looking for properties by taking just a few steps, you may very well end up with the home of your dreams.

1. How does your credit measure up? It is very important to know how your credit report will look to potential lending institutions. There are many places you can check for yourself, such as and How much open credit do you have available to you? How much of that credit is being used? Having a lot of open credit available to you (your credit cards, school loans, existing car loans, etc.) does not necessarily give you a higher credit score. In fact, in the eyes of a lending institution, it is just the opposite. It is showing them that you have a lot of open credit that you can use to get yourself deeper into debt. So, if you don't need the credit card, and it is just sitting around, cancel it. Consolidate your credit cards if you can.

2. Is your income secure? The reality of today's job market is that many employees are being let go in record numbers. If you lost your job, how would be able to cover your mortgage and for how long? Your home will most likely be your most valuable and expensive asset. You definitely want to create a backup plan for a worst-case scenario just in case.

3. Get a pre-approved loan. One of the biggest stressors during the home-buying process is getting a loan approved. Once you make an offer on a house and it is accepted, you will most likely only have 30 days or so to get your funding, inspections, and other paperwork in order. You will not only save yourself some time and stress by getting a loan preapproved, but you also know how much money you can actually offer on a house as well as possibly lock in a great interest rate.

4.Buy what you can reasonably afford. Now is not the time to think ?œextravagant??unless you truly can handle the payments. This will not be the last house you purchase. You also must take into consideration that you will not only have to cover your monthly mortgage payments, but you will also have other home-related costs such as property taxes, utilities, possible homeowner association fees, home repair costs, and a myriad of other hidden costs that pop up.

When buying a home in today's economy, you must analyze your own personal financial abilities and responsibilities closer than ever. With the number of foreclosures at a record high today, you need to prepare and educate yourself on how not to become just another statistic. By following these few short steps, you are securing yourself not only a home but a bit of financial security as well.

by Carrie Ostrea
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