Las Vegas Real Estate and Business News

Home buyers advised to get own financial house in order

Purchase process starts with review of credit report

Mar. 25, 2006

Las Vegas Newspapers

The housing market has been changing, according to housing experts, and the news may be promising for home buyers.

The Commerce Department, for example, reported that January housing starts jumped 14.5 percent from December estimates, reaching their highest point in almost 33 years.

This could be attributed to having one of the warmest Januarys in history, which permitted building starts that would have occurred later in the year.

Additionally, the inventory of existing homes is up. As a result, home buyers can expect to find prices to be appealing in the near future, experts say.

Smart home buyers need to take steps to ensure that their financial house is in order before those opportunities arise. A bad credit history can affect the ability to qualify for a loan and impact the size of the loan and interest rate that can be secured.

Many financial advisors encourage home buyers to start their process several months in advance of looking at homes by checking their credit report

While reviewing a credit report, one should check for inconsistencies such as accounts not opened, charges not made or delinquencies that were not his fault.

The credit reporting company should be contacted, written documentation should be provided regarding the item in question.

The credit reporting company will investigate and respond as appropriate. The creditor should be contacted, and the other two major credit reporting companies should be reached as well to make sure their information is current.

Know the score

The credit score plays an integral role in determining the interest rate on a new mortgage.

Equifax, the leading credit reporting company, offers a product called Score Watch to help borrowers understand what their score is today, the average interest rate for people with similar scores and specific steps the borrower can take to properly manage his score.

Score Watch monitors the FICO score -- the score many lenders use to qualify borrowes for credit -- and notifies him when a score change impacts the interest rate he is likely to receive for the home purchase.

Using Score Watch, he can select a target score and receive an alert when he reaches that score, giving him the green light to start looking at houses.

Determine the price range

One should start by examining his current income and expenses. Track these items for at least several months to calculate an average of the monthly budget.

Determine how much money is available to spend on housing.

Estimate any additional costs to be incurred with a house such as higher utilities, association fees, homeowner's insurance, appliances, as well as home repairs and yard maintenance.

Make a wish list

To avoid falling in love with an impractical house, one should identify which features are "must haves" and which are "nice to have" in the new house.

Consider the square footage, number of bedrooms and bathrooms, neighborhood, schools, and distance to work. Prioritize the extras so that while house shopping, evaluating choices will be easier.

If one knows that he would rather have an updated kitchen than a nice outdoor living space, he will be less likely to be swept away by the beautiful screened-in porch on the house that has only two working burners on its stove.

A house is the largest purchase most people ever make and it is worth taking some extra steps to make wise decisions.

If you are planning to relocate in the Las Vegas area contact us for a prompt response to any questions you have about the Las Vegas real estate market. We invite you to visit our website to view updated daily listings of Las Vegas homes at Las Vegas Real Estate MLS Search. .