Five simple steps to home ownership

 

FIRST TIME HOMEBUYERS

PART 2 OF 3

Three-part series focusing on strategies for first-time buyers

NEXT SUNDAY: Realistic buying strategies

 

HONOLULU ADVERTISER   April 15, 2007

 

BY LISA SCONTRAS

 

Custom Publishing Group

 

Kicking yourself for not buying that 3-bedroom house five years ago? The one that has doubled in price since you first looked at it? And now you are running short on down payment cash because you just had to have that fancy new car which has done nothing but depreciate since you drove it off the lot.

 

 

Many local residents who formerly rented were able to buy their first home last year joining the ranks of more than 75 million Americans who own their own home. Still, others feel like they have missed the boat.

 

Linda McCabe, Realtor and partner at Prudential Locations LLC, is passionate about helping first-timers to realize their dream of homeownership. If you’re hopelessly intimidated about the prospect of ever owning your own home, she offers these critical first steps to help you navigate through the process with confidence.

 

Step 1: Get your team together

 

Buying a home may be the biggest investment you ever make — so it pays to call in the experts. You’ll need a Realtor and a loan officer. Realtor commissions are generally paid by the seller, so as the buyer, these essential services are free. Mc- Cabe’s advice is to find someone you can relate to and who sincerely wants to help you.

 

“First you should know that we aren’t going to ‘make you’ buy something,” says McCabe, a 23-year veteran in the field. “I really love helping out first timers. If you tell me you want to buy a home, and are willing to go on the path I set out for you, I’ll give you the steps and show you how to do it.”

 

Once you find a Realtor (and you will, they are a likeable lot), the next step is finding a loan officer.

 

McCabe, who is now helping her clients’ children buy their first homes, insists the first stop — before getting into a car to look at property — is the lending office.

 

“You can even talk to the loan officer on the phone, although it’s nice to meet them in person and talk a little story — get to know each other,” she says. “Try and stay away from the Internet. They don’t know anything about our local market. And watch out for predatory lenders ... they’re still out there.”

 

Step 2: Get prequalified

 

Once you’ve found a lender you like and trust, the next step is to talk numbers. The loan officer will ask you a series of questions about your income and your expenses to determine how much house you can afford.

 

“The loan amount is the first thing you need to know,” says McCabe. “It’s your road map.”

 

She says that shoppers who skip this step and jump right into the car to look at property are only setting themselves up for disappointment.

 

“If you start looking at homes that cost $850,000 when what you really can afford is a townhome for $350,000, you’re wasting your time and you’ll only get discouraged,” she adds. “Do it right, get prequalified first.”

 

In addition to crunching numbers, the loan officer will inform you of the many first-time homebuyer programs available through the state of Hawaii — another good reason to deal with someone locally.

 

Step 3: Clean up your credit report

 

Part of getting prequalified will include checking your credit score — this may cost you $20. If your score comes in low, you won’t qualify for the best interest rates. The loan officer will advise you on what you can do to improve your score.

 

“Not everyone can buy a house today,” says McCabe. “Sometimes it’s necessary to take some time to repair your credit, have inaccuracies removed, pay down some debt or go 12 months without being late with a payment — depending on your situation that might take a couple of months or it might take a year. But that higher score will pay off when you’re ready to buy.”

 

By the way, one of the quickest ways to knock yourself out of the buying process, McCabe warns, is buying a new car. Her advice: don’t do it.

 

Step 4: Gather all your documents

 

Basically, what you need to bring to the loan officer is a copy of your most recent tax returns, pay stubs and bank statements.

 

Step 5: Start your search online

 

McCabe suggests using prudentiallocations.com to get familiar with the market and the neighborhoods.

 

“We can hand over the entire MLS book to our clients,” she says. “That way they can see the solds and the pendings, educate themselves on prices and what they should offer.”

 

With all the listings at your fingertips, you can take the dollar amount the loan officer gave you and print out a list of everything on the Island at or below that price. You might be surprised at all you have to pick from.

 

 

 

 

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