1st time homebuyers can face daunting challenges

By Heather Stoner, Associate Editor

First-time homebuyers can face a lot of puzzling questions and personal challenges in prepping themselves for buying a house. But a lot of the confusion in getting ready for the big purchase can be eliminted by making yourself a quick checklist and doing a little research.

"First, talk to loan officer and check on your credit," says Terry Cole, broker at Oswald and Associates.

Homebuyers in general, particular those first-time buyers, should also make sure that they have an active checking and savings account, she said.

There is a myth that all credit cards are bad, but first-time buyers can use their credit cards as a way to build their credit in preparation for buying a house, she said. "For first-time buyers, this is especially important, " said Cole. "Just coming out of college, they don't have a lot of credit yet. Car payments help build up credit, too."

But where is the line between good credit and too many monthly payments? This is where the debt-to-income ratio comes into play. People in the home-buying market should make sure that they have a monthly financial cushion, meaning that not all of their income is going directly to pay for debt.

"That is very important with a loan. They don't want to put a mortgage on the table for someone who has a lot of debt," says Cole. Someone in a lot of debt is "going to get in there and sink" with an additional mortgage payment.

Also, potential homebuyers should watch their spending habits before trying to buy a house. "You might want to wait to buy the furniture for the house until after you're in it," Cole says. "It looks good on the buyer to have both a checking and savings. It just shows they can save money."

According to Cole, her agency has seen an increase in new homeowners, epecially in first-time buyers. The most sought after Colleton neighborhoods, she says, are Forest Hills and Longleaf.

"The first-time buyers are naturally buying affordable homes. Forest Hills, with its wide price-range and re-sell values make it popular," she said. "Longleaf also."

Tips for first-time buyers

• Get a copy of your credit report.
  
  
• Pay off your outstanding debts, or reduce the debts you have before trying to buy a house.
  
  
• Start saving a cash down-payment.
  
  
• Get pre-approved for a loan so that you'll know your price range.
  
  
• Start researching neighborhoods that you're interested in.
  
  
• Familiarize yourself with loan terminology and legal lingo.
  
  
• Find a real estate agent/lender that suits you.
  
  

(EDITOR'S NOTE: This list was compiled with the help of Colleton County realtors and the Web site, www.homebuyingtips.net.)

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The Press and Standard - Friday, September 15, 2006 Edition, Page 7B.

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