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Never mind the news: Shop for a home and mortgage when you're ready

[Feb 27, 2011.]


Although mortgage rates dropped for the week ending Feb. 25, with HSH Associates reporting combined average rates for a 30-year fixed rate mortgage at 5.23 percent, housing markets are not expected to improve any time soon. Whether consumers are reluctant to buy in uncertain times or waiting for even lower home prices and mortgage rates is anyone's guess. Turmoil in the Middle East, rising gas prices and other events may be influencing would-be buyers to take a "wait-and-see" attitude.

Think globally, act locally: Only you know when you're ready to buy a home

Although being a well-informed consumer is important, basing your home purchase decision solely on mortgage rates, international events or experts' economic predictions isn't the way to go. Buying a home is a personal decision. Are you ready to purchase your first home, or trade up to a larger home? Answering these three questions can help determine what's right for you.

  1. Are you ready to buy a home:Whether you've just graduated college, are getting married, or landing your first professional job, certain milestones can cause family and friends to ask, "So, when are you going to buy a home?" Don't be pressured into buying until you know you'll be able to stay put for several years, and are financially prepared to take on a mortgage loan.

  2. Know your credit score: Mortgage lenders typically require FICO credit scores of 740 and above to qualify for conventional mortgage loans. FHA has more lenient credit requirements but the higher your scores and the less consumer debt you're carrying, the lower your mortgage fees will be.

  3. What are your personal and professional goals: Your answers can help to decide if now is time to buy a home. If you may be relocating for a new job or are otherwise uncertain about where you'll be living, putting off buying is understandable. If you travel frequently, or aren't ready to "put down roots," there's no hurry for seeking out suburban bliss.

If you then decide to buy, real estate pros and mortgage lenders can refer you to first-time home buyer programs and other programs designed to help with transitioning between renting and owning your own home.


About Author:

Karen Lawson is a freelance writer with extensive experience in mortgage banking and home loan loss mitigation programs. She holds BA and MA degrees in English from the University of Nevada, Reno.

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