As real estate prices continue to slide in greater Phoenix and the surrounding towns including Scottsdale, Fountain Hills, Peoria, Tempe, there has been a flurry of activity of an again emerging class of buyers, First-Time home buyers.
Prices have fallen back into affordability levels. Interest rates are still historically very low. And with Federal legislation allowing incentives and exceptions in Fannie Mae and Freddie Mac financing,
...these buyers are who had been for many years, priced out of entry level housing are now the lone winner of they housing crisis sweepstakes.
However, if you are in the market to buy a home using FHA financing, keep an eye out for danger signs of your personal finances before you buy as financing and purchasing home using FHA loans is now more than ever credit score driven.
- Know your FICO score and what it means
- Review your credit report with a lender sooner than later
- Report mistakes or outdated information
- pay down debt
- do not make an large purchases
- Dont' fall for credit repair scams
- Pay your bills on-time
these may be signs that your finances are in trouble. If you find yourself ,
- maxing out credit cards
- paying late on debt
- borrowing on cards to pay other cards
- tapping into home equity to pay other debt
- receiving notices that credit lines are being reduced
- HELOC or credit card rates are being increased
If this might be the case, I encourage you to address the situation sooner than later. And,...
...definitely do not add more debt and leverage and
don't purchase a home before your financial foundation is firmly on the ground.
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© James Wexler, *Danger Signs that your Finances are in Trouble! *
Contact James Wexler (480) 221-8080 for all your Phoenix | Scottsdale Real Estate needs
Mr. Wexler , is it bad if all of these are trouble for me ??? paying late on debt
Welcome to most people's world
Mr. Average American - this is a problem for most Americans.
Borrowing, borrowing and borrowing from lenders who make the majority of their money from people who cannot pay and carry big balances.
James, you make some great points here. I totally agree that people should not buy unless they have a stable surface.
Danny - excellent point.
Job stability may be the most critical right now. Even more so , then a down payment and other debt. Dont want to tie up money if there is a chance you could be unemployed for a length of time.
No one likes to think of it, however, it is something we have to during these times.
James, - the sad thing about the first comment above is that it is true.
It is true for a large portion of americans. In fact, I have heard that only 40% of Americans pay any taxes. As a result 60% of people most live heavily in debt.
Scott - thanks for the comment. I had no idea that only 40% of americans pay taxes. That is astonishing.
I think the days of capitalistic consumption are over for many years. Debt was not our parents lessons. And we will soon be teaching our children about saving and spending.
james - great list.
I always recommed to my clients to follow a similar list prior to starting the home search.
Barbara - good advice and difficult advice as a realtor.
We want to make sales. However, qualifying a client for their own good and your own good is good business practice. I am sure it pays off. - Good luck!!
there are so many free web sites to check your credit score these days that I recommend to all my clients to keep up to date with FICO scores, debt balances and any possible mistakes or errors
Jason - Good Advice.
As sometimes fearful as we are to open our 401K statemetns and bank account info. It can be equally frightening to look at your credit score and credit report.
Though, knowing your financial health is critical and getting more so these days.
I agree that these are all great points. I know that risk based pricing for FHA loans entered the market a little while ago. The majority of my business is first time homebuyers and 99% of those get an FHA loan.
Rich - first-time home buyers are the foundation of the real estate market. As you know, it is critical for them to know their financial health. Hope business is good for you,
Rich - I do a lot of FHA loans and most of these buyers have never been involved in looking closely at credit reports as it pertains to buying a home.
knowing your FICO, and looking for any mistakes is critical
Primetime / Nick Rausch - very important advice to first-time homeowners. Most of which, have never really looked into their credit score, balances versus limits, tri-merge scores, payment history , tax leins, etc...
I agree with your tips for consumers. Thanks for the reminder.
Gita- these are probably basic tips for most consumers. Though, it seems like an easier reminder to take that extra step when qualifying financial ability to buy in this market
James ~ These are great tips for consumers. What a great reminder for all of us.
Darleen - I , like many people, had to learn these tips at the last minute instead of being prepared before I purchased my first home.
It is always a good idea to know your financial health sooner than later.