Spring has officially arrived and with it comes the peak home buying season.

March 26, 2011

nwi.com: Saturday, March 26, 2011

"Our confirmed appointments for showings are running 2-3 times higher than they were 90 days ago, so we're very encouraged," Herm Hoge, broker/owner along with his wife Kris of Munster's RE/MAX Realty Associates, said. "Honestly,it's as busy as it's been in 2 years. I think it took a while for sellers and the real estate data to stabilize - pricing was difficult in the recent past - now, sellers and agents have a better grip on the market - it's been a hard reality check. Buyers know prices are right, they have more confidence."

Like other real estate professionals, Hoge cites 3 key reasons for such a dramaticsurge in activity: after a very long, cold and snowy winter, the weather is encouraging people to go outside again; people who were taking a wait and see attitude have a sense of urgency now that there's been some upward movement in interest rates; and historically March, April and May are good months in real estate since families ideally want to move into their new homes and be settled before the start of school in the fall.

Since there are so many advantages for buyers to act now - interest rates continue to remain significantly lower than any other period in history, prices are reasonable and selection is better than ever - it's important to be prepared. As the competition begins to heat up this spring, planning ahead can help you avoid costly missteps.

Before you take the plunge, consider these 5 important steps every buyer should take to prepare for home ownership from First Financial Bank's director of mortgage lending Ed Hensley:

1. Check your credit score: Before you start to search, check your credit score and know where you stand. Make sure your report is accurate and fix any problems before you do anything else.

2. Have a plan: Know how much home you can afford and be ready to commit to a new home for at least three to five years to build equity.

3. Understand the pre-approval process: When you meet with a mortgage officer, find out what documents you need in order to be pre-approved. This might include copies of current pay stubs, a credit report and tax returns depending on your occupation.

4. Begin the house search: Determine what neighborhood you want to be in and work with a realtor to find a home that meets your needs and goals for the future.

5. Finding the right mortgage: Whether you're a first-time home buyer or an experienced one, you want to identify a mortgage program that fits your family and lifestyle. Sit down with your mortgage loan officer to review and understand all the options available to you.

If your goal this spring is to purchase a new home, many Americans would agree you are making a smart financial move as well. According to a recent National Association of REALTORS® (NAR) survey, 95% of owners and 72% of renters believe that over a period of several years, it makes more sense to own a home than continue renting.

Since it is often the largest financial transaction a person makes in their lifetime, it's no surprise that purchasing a new home will take some time and research. A good first step is to sit down with a loan officer to determine what you are trying to accomplish and check your credit score, according to Hensley.

"Once you make the commitment, where do you begin, what do you do? Some people know more than others and a lot of people rely on what they have heard from their circle of influence, their friends and family," he said. "The key benefit of sitting down with a mortgage professional is that we can give you all the facts. Our job is to know all the products, all the ins and outs, so we can solve all those myths versus facts that are out there. It's all about your monthly budget, what can you afford, what do you feel comfortable with compared to what you qualify for, what do you want your house payment to be - what's the reality?"

Like First Financial Bank, many lenders provide free pre-approvals which are a thorough review of your entire financial situation including your credit history. Not only will a pre-approval steer you toward the right price range when looking at homes, it also shows sellers that you are a serious buyer.

Another advantage to pre-approval is learning what you can do to improve your credit score in as little as 30, 60, 90 or 180 days, according to Hensley

"Pre-approval is a service we provide because we want to work with you and be a partner in the process," he said. "We will look at all the options out there for you. As a home buyer the more prepared you are when you start the process, the smoother the process goes. It's a prudent thing to do. You're setting yourself up for success. You can go into a transaction with confidence, and it speeds up the whole process."

That's why pre-approval volume is picking up tremendously this spring right along with appointments for showings."When you consider the affordability index, it's a great time to buy a home," Hensley said.

"With rates at the lower end of the curve historically and the level of inventory, it's very affordable right now. We've seen a lot of success stories recently with people being able to afford their dream home - in a neighborhood they really wanted or a bigger home than they anticipated."

Copyright 2011 nwitimes.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Dowload this Article