The Ice is Out - Think Summer at the Lake!

The ice is out on area lakes and it's got everyone daydreaming about sitting on a lounge chair next to their favorite lake or casting a line, landing the big one. Since moving our family to the lake in 2010, I cannot imagine life not on the water. I love getting home after a long day of showing houses, jumping on the pontoon and going out for a leisurely cruise.  No need to pack a bag or load the boat here, we are ready to have fun on a moments notice! 


One of my absolute favorite activties on the water is "picture fishing". I love grabbing my camera, getting out on the water and capturing as much wildlife as possible.  We watched this mama loon raise her babies all the way from nesting in the spring, teaching them to fish all summer, and finally flying south for the winter.  We are eagerly anticipating the return of the loons this spring.  There is nothing more majestic than the call of the loon.


Buying a lake home or summer cabin is now more affordable than ever.  The average lake home price in the Northwest Minnesota MLS in the past year was only $233,201!  Currently in the Bemidji area alone there are 75 lake homes to choose from ranging from $59,000 to $838,000.  In the Bemidji area lake homes are typically listed between Spring and Fall.  This year we anticipate the season starting early with the exceptionally warm spring are experiencing.

Start thinking about your future now!  Many future retirees are buying their lake lot now, while prices are down so they can build when they are ready to retire.  Currently in the Bemidji area, available waterfront lots range from $9,900 to $1,499,000.  There is literally something for everyone! Whether you are looking for that babbling brook, a low maintenance CIC, a never ending sand beach, or a secluded river front property you will find it here in Northern Minnesota.  To help you decide what type of waterfront suits you best you need to ask yourself what what you are looking to get out of your lake or river?  Is it the views you desire?  Do you like to fish? Would you like an area for swimming? Do you enjoy recreational activities like jet skiing, tubing or water skiing?  Or are you in it just for the wildlife that flocks to the waterways?  These are all important questions when choosing your new waterfront property.  Once you answer these questions, contact me and I will help you find a property that would fit you.  You can also use the DNR lake finder at http://www.dnr.state.mn.us/lakefind/index.html to search area lakes to determine their classification.

As I write, I dream of summer barbecues, swimming, tubing, and fishing on the pontoon followed by unforgettable summer sunsets like the one pictured.  People come from all over the country as tourists to see the beautiful area we live in, just to stay for a week or a few months.  You can live like a tourist every day of the year!  Why wait until you are retired to live your life to the fullest?  Call me today to get out there and start looking for your dream home!

Tenants and Toilets

The next step after you purchase your investment property is to rent it.  Time to prepare yourself for Tenants and Toilets!  Most investors like the idea of rental income from real estate but they don't want to go through the motions of selecting tenants, moving them in, collecting rent or fixing toilets.  Here is an outline that you can use to minimize the headaches!

1. Prepare the home for renting.  The better condition your rental property is in the better chances you have of getting good renters.  Think to yourself, "What type of person would live in this house?"  If the house is in poor condition you will probably get renters who are in poor condition, ie. poor credit, poor job (if any), poor rental history.

2. Selecting tenants. Always use an application.  Have the prospective tenant fill it out and return it to you.  If they do not pass this step then chances are they won't pay rent on time either.  Call their references, do a background and credit check.  Make sure to ask them why they are moving and when they plan on moving early on in the process.

3. Moving in.  Use a move in check list and take pictures of the property prior to the tenant moving in.  This way, if there are damages, there will be no discrepancies in the stories.

4. Use a Home Manual.  Have a home manual for each property, outlining what to do in case of an emergency, how to check for simple problems like a tripped breaker, phone numbers for utility companies, policies and procedures.  This can eliminate those 1am phone calls about not having hot water, when it may be as simple as a tripped breaker.

5. Lease Agreement.  When at all possible get a year lease or more.  Have a good lease drawn up and make sure all your bases are covered and that it complies with the Landlord and Tenant Act https://www.revisor.leg.state.mn.us/statutes/?id=504B.  For Bemidji City codes check out www.ci.bemidji.mn.us  

6. Collect a Deposit.  It is a good rule to collect a deposit in the amount equal to one month's rent.  Keep it in a separate bank account.  You will be returning it to the renter when they vacate if there are no damages.

7. Collect Rent.  Have a clear rent payment policy in place of what forms of payment you accept and where it is to be sent or dropped off at.  If rent is not received on time charge a late rent penalty fee. 

8.  Retain Residents.  If you had good renters, try to retain them for another lease period.  This can save you a lot of headaches by not having to select new tenants.

9. Have a list of preferred contractors. It doesn't always pay to be a DIY'er!  In the long run you will probably save more in time and money by hiring a professional rather than trying to do all repairs yourself.  However, you should have a general knowledge of how the home works.

Follow my easy steps and you will be on your way to being a successful landlord.  And, if you buy an investment property from me, I offer FREE advice and resources to help you get started!

Outlook for 2012

We are all children at heart.  Especially when it comes to asking questions!  Consumers today remind me of my 2 year old daughter, asking the same questions over and over and hoping/praying for different results.
 "Can I have candy?"   "Are we there yet?"  "How about now?"

Thankfully adults have more mature questions like, "How's the market, now?"  So without further adieu I will try and predict the market in the Bemidji area for 2012!  Using local MLS statistics I have compiled some facts and some speculation based on what I have heard and what I know to be true.

•  The total number of listings in Bemidji is down 21%. I believe that more sellers are waiting until prime spring/summer season to list, because the need to sell isn't as great as it has been in the past few years.
•  There are 26% more homes pending this year than last year at this same time.  With the mild winter it has been easier for buyers to get out to look at homes.  Also, I see an influx of first time home buyers fueling the market and getting things moving.  
• 41% more homes sold.  This speaks for itself.  The market is rebounding and homes are selling.
• The total volume of homes sold is up 90%! In my opinion this shows that with the first time buyers finally fueling the market, sellers are able to be move-up buyers and move more expensive homes that in the past few years have been taking longer to sell.  Also, because interest rates are so low buyers are able to afford a larger home.
• The average sale price is up from $122,016 last year at this time to $164,313 year to date.  I believe this is due to the fact that the average buyer is able to buy a larger home because of low interest rates. 

One of the other questions that gets asked frequently is, "What effect do foreclosures have on Bemidji's market?"  I believe that we will start to see less foreclosures in our area compared to the past 5 years and that the average price of those foreclosed homes will go up.  During those past 5 years we have had an influx of lower valued foreclosures that have brought the average sale price down for our area considerably.  Homeowners with homes of greater value seem to have been able to hold on to their homes longer, but we are now starting to see some of them come on to the market as foreclosures.

I hate to sound like a broken record or like my 2 year old, but remember, NOW IS THE TIME!  Don't miss out.  I believe that the market is now on the rise and people will be kicking themselves in the future for missing out on this wonderful opportunity to buy in Bemidji!  So get out there and find your dream home, vacation cabin, or rental property today!

Little Green Houses

Now you know what you need to get started in investment real estate: Little Green Houses!  Now let's expound on HOW?!  I mentioned earlier that there are "creative" ways to purchase your first investment property, now I will expound on those ways along with the more traditional ones.

• Cash is King (whether it's your own or borrowed from a rich friend or relative) You may be able to secure a better "deal" with this method.  Often sellers are more negotiable when a buyer pays cash, because it can close faster and with less issues.

• 20% cash down and finance the rest through your favorite mortgage banker. This option would be for a buyer who has 20% of the purchase price in liquid funds of thier own.  How do you get cash like this you say?  Start saving or sell things you don't use/need anymore.

• 20% down with Other People's Money (OPM)!  How do I get OPM, you say?  Either from a friend or relative, Home Equity Loan or Line of Credit on your personal house, or from another investor/business partner. 

• 10% down!  My favorite banker, Anne Kehoe from Wells Fargo Home Mortgage, introduced me to a program where you can put as little as 10% down on an investment property if it is a HomePath property!  This means that it is owned by Fannie Mae.  To view a list of eligible homes in the area visit http://www.homepath.com/ . To find Anne go to www.wfhm.com/wfhm/anne-kehoe

• Contract for Deed.  This is how I bought my very first investment property!  They are difficult to find because many sellers are not able to offer a contract for deed. But if you are unable to obtain a traditional mortgage this is another avenue.  As long as the terms are right and the house is a good fit.  It works well for people who have a good down payment, but for some reason cannot get financed.  (For me it was because I was self employed and could not show 2 years of income at the time.)

• Credit card.  I do not recommend this method but I have to tell you that I used it once!  I bought a lot at the county land auction for $13,400 with a credit card check.  It was a promotional no interest, no payment for 6 months and I had a limit of $13,600!  I knew that I could pay it off from another sale that was coming up within that 6 months so I took the plunge.  USE THIS METHOD WITH EXTREME CAUTION!!!

If you or someone you know has always dreamed of investing in real estate NOW is the time.  First of all, prices are down and rates are still incredibly low!  If you'd like to get started NOW, contact me TODAY! Or you can always check out my website to view all of the area listings at: www.realliving.com/mandy.gazelka  Happy hunting!

Getting your home to shine

When selling your home in the current market it has to be the best in it's price range in order to get it sold in a reasonable amount of time.  In a world where everyone wants more for less, in order to get the best price possible for your home, it has to shine!  As I was cleaning my own home I began to think of what my home would look like if it were on the market and what things I would need to do to prepare to sell.  Looking around my kitchen I looked over at my fridge (top), covered in precious artwork done by my 2 little girls.  While I love every single one of those masterpieces, if I were selling, I would take them down (bottom) for showings or during the duration of my listing as I'm sure it would be distracting for potential buyers to see the beautiful paintings, to-do lists, and calendars.  The same goes for too many family photos.  While you want to make your home look like a happy place to live you also want the buyers to look at your house, not your life.  The only time I would recommend photos would be if you lived on a lake or in the country where you were able to capture pictures of the wildlife or big fish you caught on your lake!

If the thought of even getting to the place where you are ready to worry about these "little things" scares you, it may be time to hire a professional.  Like I said in a previous post, cleaning, de-cluttering, doing small repairs and painting are the the most important and most cost effective ways to increase your home's value and decrease it's time on the market.  In the busy world we live in where not everyone has time to get these projects done, a great place to turn would be a home stager.  In the Bemidji area I would recommend checking out Kendra Fuller at Urban Essence Interiors on facebook or on the web at http://www.urbanessenceinteriors.com/  By hiring a stager/painter you can check off half of your to-do list while getting top notch advice.  Not everyone has the same tastes in decorating so having gender and taste neutral style can help potential home buyers have a vision of what the home would look like if they were to live there. If you are a seller this is exactly what you want; people to "mentally move-in" to your home!

Statistics show that staged homes spend 50% less time on the market.  Average days on market in the Bemidji area so far this year is 180 days.  Cutting that in half could save you a lot of headaches. Also, a staged home can sell for up to 7% more than a non-staged home.  The cost of staging your home now will be much less than a price reduction later.  So whether you are a DIYer or you need a helping hand, taking the time to prepare your home for sale is a must!  Don't forget you can always call or email me with questions or for a free consultation.  Happy Selling!

Rock Bottom?

Being a Realtor people are constantly asking me how the Bemidji market is.  Lately, their favorite question is: "Have we hit rock bottom yet?"  My answer: "We won't know until we start going back up."

If you take a look at the chart below you will see a slight decline in the depreciation between 2009 and 2011.  In 2009, depreciation for the Greater Bemidji Area (56601 zip code) was at is all time 10 year high at around -6% per year. Since then depreciation has slowed to around -3.7% for the Bemidji zip code.  So, even though we haven't hit "rock bottom" on home sale prices, it appears that we have as far as the rate prices are falling at.

The chart and statistic information can also be viewed on my website at www.realliving.com/mandy.gazelka Click on local information and you will be able to search any zip code or address to obtain information on housing, people, economy, schools, environment, and quality of life for any given neighborhood or area.

Another great tool that was just released by Beltrami County is http://www.crimereports.com/ .  This website allows you to view all the calls for assistance in any given area in Beltrami County starting this year.  It will hopefully alleviate some of the calls to the local police station inquiring about the crime rates in certain areas or neighborhoods.  It can also assist potential home buyers in choosing an area to live in based on the perceived safety of the neighborhood.  Check it out and let me know what you think!

The Game of Monopoly

When it comes to real estate investing, Monopoly is the name of the game!  The object of the game (as defined by the actual game) is to become the wealthiest player through buying, renting and selling property. If we take the principals of Monopoly and apply them to real life real estate investing here's what we have: He who owns the most little green houses and red hotels WINS! 

If it is your goal to be come wealthy I believe that real estate investing is a great avenue be on.  In the rules of Monopoly it also states that "you may buy and erect at any time as many houses as your judgement and financial standing will allow".  You must exercise caution and use your best judgement, even some of the greatest real estate investors in history have been bankrupt a few times. As with any investment, there is a certain amount risk involved.

Here is my light hearted approach to explain what you need to become a real estate investor using the game of Monopoly as an example:


1. Decide if you have enough money to purchase a property (pay with cash or give a mortgage to the bank)



2. Identify a property

3. Purchase the property

4. Collect rent


5. As time goes on, decide whether it is in your best interest to sell or improve the property

6. Repeat



Believe it or not, I actually use this as a model in real life!  My husband and I often say to each other, "little green houses, BIG red hotel, little green houses, BIG red hotel".  It is our goal to someday own commercial real estate (red hotels) as a passive income generator.  To achieve the goal of being a wealthy real estate investor you need to start somewhere by buying your first little green house.  Once you own one piece of income generating property it makes it easier to buy more by leveraging what you already have.

For most people, getting started by buying that little green house is the hardest step.  Often it takes creativity on the investors part to make it work financially. One great way is to look at the assets you already have and figure out if you can use them as leverage to make your first purchase. 

You always hear people saying, "Man, I wish I would have bought real estate back in the '90s."  Don't make that mistake again by missing out on one of the best buying times in our history, you can hear yourself saying it now, "Man, I wish I would have bought back in 2012!"

For a list of little green houses in the area email me at mandy@firstrealtybemidji.com today!

2011 Year End Review

We've all heard the news about the real estate market around the country and in the metro areas, but I'm sure you've wondered how we are doing up here in Northern Minnesota.  Here are the numbers:

654 Listings Sold (up 5.5% from 2010)

2238 Properties for Sale in 2011

$166,463 Average List Price (down only 3.57% from 2010)

$115,183 Average Sale Price (down 10.6% from 2010)

161 Average Days on Market

Statistics in this post were obtained from the Northwest Minnesota MLS.

What do all these numbers mean?  It's taking longer to sell houses for less these days.  I feel that a big part of the 10.6% depreciation that we experienced in 2011 was due to foreclosed home sales.  Many of the foreclosed homes in 2011 were in poor condition, and therefore brought a low sales price which brings down the average.

The good news for buyers is that there are many homes to choose from, sellers are coming down from their original list price an average of 13%, and interest rates are still at all time lows! Have more questions on Northern Minnesota real estate market conditions?  Don't be shy, just ask!

Preparing to Sell

In Northern Minnesota, real estate tends to have a season.  During the coldest of winter months buyers are less active and homes typically don't "show" as well without the green grass and blue skies.  Most sellers wait to put their homes on the market in the spring, unless they have the need to move quicker.  Which brings me to what you can do if you are a seller while you wait for the spring thaw!

1. De-clutter.  Remove as many personal items, family photos, and kick knacks from your home as possible. You want buyers to be able to look at the house instead of focusing on your stuff.

2. Deep Clean.  Pay special attention to those places that get touched often but most people don't think about.  Light switches, door knobs, walls near doors, windows and baseboards.  A clean house shows a buyer that the home is well cared for.

3. Repair.  Fix any of those little nagging items that have been on your list that you may live with day to day but to a buyer they show neglect.

4. Paint.  Freshen up a room or two or just touch up paint as needed.  Make sure to choose neutral colors to appeal to the largest audience.

4. Call ahead of time.  Call me and I'd be happy to walk through your home with you to let you know what I think you could do to help you sell your home faster and for the best price when the time comes.

First Time Home Buyers

Have you been thinking about buying your first home, but don't know where to start?  I'm here to tell you how.

Step 1:  Get your finances in order. 

• Have on hand your tax returns, W2s, bank statements and pay stubs.   
• Have a little nest egg.  There are programs out there still where you only need as little as $1000 of your own money but the more you have saved, the better.

Step 2:  Make an appointment with a real estate lender. 

• If you don't know one, I'd be happy to refer you to someone I trust
• There you will get a pre-approval that tell you how much you can afford and will help you with negotiations further down the line.

Step 3:  Come see me, your trusted Realtor.

• I will walk you through the process of choosing a home and take you the rest of the way through your purchase.

If you would like a more comprehensive guide I will send you one, free of charge!  Just shoot me an email or give me a call.

Changes to the Homestead Benefits

A short while ago I was asked at a closing what had become of the Homestead Tax credit in regard to property taxes. I'm sure there are plenty of questions as to how this will effect homeowners. I will try to sum it up as best as I can and also provide a link to the MN Dept of Revenue for their explaination.

For most people there is still a benefit to homesteading your property. Homesteading means that you occupy the property as your primary residence, it's where you get your mail, and it's the address listed on your driver's license. Only the owner or qualified relative of the owner can homestead the property. The legislation that most people were aware of and the cause of the concern was when congress repealed the Homestead Credit. However most people don't know that it was replaced with the Homestead Market Value Exclusion. The extent that it effects each homeowner depends on the property tax rate in your area. So instead of a straight up credit there will now be an exclusion for a certain amount of your taxable market value. It also states that at around $414,000 there really won't be a benefit to homesteading.

Check out this link to the Dept of Revenue for more infomation:

http://taxes.state.mn.us/property/Documents/hmve-taxpayers.pdf

Feel free to contact me with any questions and I will do my best to answer them!

Today's Market

Most common question I get everyday- How's the real estate market?

My resonse- It depends!

People hate to hear that, but it is true, it really does depend. It depends who you are, a buyer or a seller, and what you are looking for. If you are a buyer, the market is great! Interest rates are at historic lows, home prices are down, there truly has never been a better time to buy. If you are a seller, it depends again. Most of the time I would say don't sell unless you have to. Just hold tight and maybe refinance into a new lower rate if possible. But sellers can also be buyers, if have a need to move and have the ability to sell, they too may by able to take advantage of the great buyers market and get a great deal on your next home.

So what is holding the market back? In my opinion it's the lack of First Time Homebuyers. First time buyers fuel the market. When they purchase a home it allows others to be move-up buyers and so on. My conundrum is what is holding them back?! With the market so primed for FTHBs, I can't believe they aren't knocking down the doors to purchase their first home! I think there are a lot of misconceptions with home financing these days. There are still programs out there for people who don't have a huge down payment, there are even ones out there that all you need is $1000 of your own money! You don't have to have "perfect" credit. But you do have to be responsible and be able to afford your monthly payments.


Today's market is volitle but there are deals to be had. And with my help, buyers can turn the american dream of home ownership into a reality.

REO and foreclosures in Bemidji

REO: Real Estate Owned or Bank Owned

The Bemidji real estate market is beginning to be "REO Driven". What does that mean? It means that a large number of the homes sold in the past few months have been REO property. The banks are able to keep reducing prices on the real estate they own until the property sells and that is bringing down residential home prices in Bemidji. It's is good for buyers but for ordinary sellers.

Remember, just because a property is REO does not mean it is a "good deal". Sometimes a buyer must wait until a property has been on the market for a while for the bank to reduce their price, even after that you may have to bargain back and forth with the bank until you come to a price you are comfortable with.

If you want to find REO (Real Estate Owned) or foreclosure properties in Bemidji the best way is to call me for a list. But if you want to search on your own, I have come up with a few websites for you to try.

http://www.pasreo.com/

http://www.reotrans.com/

http://www.ocwen.com/

http://www.fnams.com/

http://www.realtytrac.com/

http://www.res.net/

http://www.homesteps.com/

http://reosearch.fanniemae.com/

If you want to take a look at any of the properties you find on these sites, just give me a call.

Foreclosure Buying

Purchasing foreclosed homes is the current talk of the town. You may be able to save up to 50% by purchasing one of these properties. There are a few things to think about and investigate before you go ahead with your search.

1. Most foreclosed homes are sold as-is with no disclosures. This means that you will have to inspect the home yourself or hire a professional home inspector to make sure it doesn't have any major defects.

2. Just because it's a foreclosure does not mean it's a good deal.

3. Get pre-approved before you make an offer. Properties owned by a bank usually require a pre-approval letter from a lender at the time of offer or the offer will not be considered.

4. Make sure you have the funds to do all the necessary repairs. Typically your bank will not lend you extra money to do repairs. Some of which may be costly, such as a septic, well, roof or foundation.

5. Check for freeze damage. Especially in Minnesota homes may sit vacant over the winter without the proper winterization. In this case you may have burst pipes and/or water damage.

6. Get a REALTOR to represent you in the transaction. It's always a good idea to have an agent represent you and your best interests during any real estate deal. They will be able to use their knowledge and expertise to guide you through.

Of course there are more steps to purchasing a foreclosed home but these are a few tips from my personal experience to get you started. Contact me today to get started investing in foreclosures in the Bemidji area.

Investing

The first question people ask me when I tell them I am a real estate agent is: "How's the market?" I always say "Great!” They usually give me a puzzled look due to the recent talk on every news channel in the country. Now let me explain why I think it's GREAT. With recent foreclosure rates and the oversupply of inventory on the market, appreciation has skidded to a halt and in some cases prices have started to fall. This may seem like a bad thing, but think of it from an investors stand point. The bottom line is: NOW IS A GREAT TIME TO INVEST IN REAL ESTATE!

Mortgage companies are dumping homes they have gotten back due to foreclosure for unheard of prices. Typically these homes are in disrepair and could use a few finishing touches. If you are willing to take the risk of investing in real estate and put a little elbow grease into them you can turn a profit. Many of you have watched the “Flip this or that House” on TV and thought many times “I could do that!” well you can! But as you’ve also seen, if a job is not done right you can also loose. The biggest tip I can give a first time investor is to get educated and do your research.

I am going to be starting an “Investor’s Club” meeting to help people who want to get into investment real estate. The first class will be next Friday the 25th from 12-1pm at the Bemidji Armory in the back classroom. The cost to join is only $5 per time and that includes your lunch! It will be a round table discussion where people can ask questions and bounce ideas off of each other. Email me if you want to attend at mandy@firstrealtybemidji.com

5 Common First-Time Homebuyer Mistakes

1. Not asking enough questions of your lender and missing out on the best deal.
-Know your options, there are many variables such as ARMs vs. Fixed rates and 15, 20, and 30 year loans.

2. Not acting quickly enough to make a decision and someone else buys the house.

3. Not finding the right agent whose willing to help you through the homebuying process.

4. Not doing enough to make your offer look good to a seller.
-Price is not the only thing that is important to a seller. Think of other terms like closing date, pre-approved financing, contingencies, inspections, and closing costs.

5. Not thinking about resale before you buy. The average first-time buyer only stays in a home for four years.

How to Choose a REALTOR

1. Ask how long they have been in residential real estate.

2. Ask if it is their full-time job.

3. Ask what designations they hold. (Designations, such as GRI and CRS, which require that real estate professionals take additional, specialized real estate training, are held by only about one-quarter of real estate practitioners.)

4. Ask how many homes they sold last year.

5. Ask if they will represent you exclusively, or if they will represent both the buyer and the seller in the transaction. (While it is legal to represent both parties in a transaction, it’s important to understand where their obligations lie. A good REALTOR will explain the agency relationships to you and describe the rights of each party.)

6. Ask if they can recommend service providers who can assist you in obtaining a mortgage, making repairs on your home, and other things you need done.

7. Ask what type of support and supervision the real estate brokerage can provide them. (Having resources, such as in-house support staff, access to a real estate attorney, or assistance with technology, can help the real estate professional assist you in your transaction.)

8. Ask how they will keep you informed about the progress of the transaction. How frequently? Using what media? (This is not a question with a correct answer, but that one reflects your desires. Do you want updates twice a week or don’t want to be bothered unless there’s a reason? Do you prefer phone, e-mail, or a personal visit?)

9. Ask for testimonials from clients who worked with them in the past.

10. Finally, choose a REALTOR who listens and understands to your needs and desires. This person will be assisting you in possibly one of the largest financial decisions you will make in your lifetime, they should be someone enjoy working with.

Steps To Prepare for Homeownership

1. Decide how much home you can afford. Generally, you can afford a home equal in value to between two and three times your gross yearly income.

2. Develop a wish list of what you’d like your home to have. Then prioritize the features on your list into needs vs. wants.

3. Decide the area you want to live in. Consider items such as schools, commuting, recreational facilities, area expansion plans, and safety.

4. Determine if you have enough saved to cover your down payment and closing costs. Closing costs, including taxes, insurance, and transfer fees average between 2 percent and 7 percent of the home price.

5. Get your credit in order. Obtain a copy of your credit report. The truly free site is www.annualcreditreport.com this is the one to use, not those ones you see on TV.

6. Determine how large a mortgage you can qualify for. Also explore different loans options and decide what’s best for you. Remember you must be comfortable with your payments. Just because you qualify doesn't mean you can afford it!

7. Organize all the documentation a lender will need to pre-approve you for a loan. Tax returns, W2s, bank statements, and pay stubs are the primary sources your lender will ask for.

8. Do research to determine if you qualify for any special mortgage or down payment assistance programs, ie. VA, FHA, or My Community Mortgages.

9. Calculate the costs of homeownership, including property taxes, insurance, maintenance, and association fees, if applicable.

10. Find an experienced REALTOR like me who can help you through the process. Watch for next week's post for information on how to choose a REALTOR.

As a REALTOR I specialize in educating and informing buyers and sellers to make the best decisions they can when it comes to real estate.

Credit

The topic of the day is credit. Credit is one of the most widely misunderstood components of home buying. In order to purchase a home you must make sure your credit is the best it can be. Having good credit can save you money when it comes to your mortgage. Your credit score affects your interest rate, mortgage insurance rate, and your home purchasing power. The best way to make sure you have good credit is to pay your bills on time, and never default on any loans. Below are ways you can improve your credit.

Now is a great time to buy! Interest rates are at historic lows and home prices stable. It's a buyer's market which means sellers are more negotiable than ever and home prices are reasonable.


8 Ways to Improve Your Credit

Credit scores, along with your overall income and debt, are a big factor in determining if you’ll qualify for a loan and what loan terms you’ll be able to qualify for.

1. Check for and correct errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.

2. Pay down credit card bills. If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score.

3. Don’t charge your credit cards to the maximum limit. Try to have a balance of no more than 10% of the available credit at one time.

4. Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.

5. Don’t purchase big-ticket items for your new home on credit cards until after the loan is approved. The amounts will add to your debt.

6. Don’t open new credit card accounts before applying for a mortgage. Having too much available credit can lower your score.

7. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.

8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.

This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation. To obtain a complete copy of the publication, “Knowing and Understanding Your Credit,” visit http://www.homebuyingguide.org.