First-Time Buyer's Guide (Home buyer)

Doing it right the first time -- Buying a home can be a daunting experience -- even for a savvy veteran. When it comes to a first time home buyer, it's downright scary. It can keep you awake all night. In the light of day, however, it's a business transaction that thousands go through every day. If they can do it, so can you. Here's a little help.
Deciding to take the plungeUnderstanding credit -- How your credit score impacts your home-buying ability and how you can improve it.
Are you a candidate for pre-purchase counseling? -- Pre-purchase counseling for inexperienced home buyers is now widely available.
How much house can you afford? -- Let us help you do the math by figuring your housing expenses against your income.
Home buying 101 -- Escrow? Jumbo loan? PMI? Before your head is swimming with these house-buying terms, get a quick vocabulary lesson in some real estate and mortgage terms.
There's a first time for everythingFirst-time home buyer programs -- Here's why the best place to get a mortgage might be your state capital rather than the local mortgage broker's office.
Tax breaks for the first-time buyers -- As a homeowner, you'll now have an added dimension to your taxes.
Tips for the first time buyer -- You may be a rookie, but you don't have to act that way.
Good and bad news about good-faith estimatesIns and outs of good-faith estimates -- These listings of all your closing costs can vary widely, so it's a good idea to shop around.
When good-faith estimates go bad -- Sometimes called "guesstimates," they can cause sticker shock at closing.
Ready, set, go!Can you really buy with no money down? -- A variety of programs make it possible to move in without cash up front.
Securing the loan: Your credit and credit scoreMortgage lenders closely scrutinize your financial history to determine whether to approve your loan application.
Of primary concern are your credit report, which details your loan history, credit cards, mortgages, bankruptcy filings and other financial information, and your credit score, which uses your credit report to arrive at a numerical representation of your overall creditworthiness.
Credit scores (sometimes called FICO scores after Fair Isaac & Co., the firm that created the most commonly used form) range from the 300s to about 900, with most home buyers falling in the 600-700 range.
Factors used to determine your credit score include:• Past delinquency:Those who have failed to make payments in the past tend to do so in the future. The more recent a delinquency, the more it counts against you; a 30-day delinquency within the past 12 months really hinders your chances of securing favorable mortgage terms.
• Length of credit:The longer you've had credit, the better.
• Credit use: If you're "maxed out" or close to your credit limits, you're viewed as risky.
• Mix of credit: Someone with a combination of revolving and installment debt is considered less risky than one with only a secured credit card.
The higher your credit score, the less risky you appear to a lender. A good credit score will help you qualify for a mortgage loan and obtain better terms.
Cleaning up your credit reportWhy check your credit report before your lender does?
Because an estimated four out of five credit reports contain some kind of misinformation -- errors you'll want to clear up before approaching any lender.
Obtain copies of your credit report from all three credit reporting agencies -- Equifax, Experian and Trans Union. Probably each will differ from the others in small ways.
Tips for cleaning up your credit report• Look closely for any errors and correct them. Check for credit cards you no longer use and close them out.
• Note late payments and credit balances; you may have to explain them to a lender.
• Compare account numbers to make sure they're yours.
• Resolve outstanding bills.
• Pay all bills on time
• Limit your amount of outstanding credit. Even if you pay your bills on time, you'll improve your credit score by having lower balances and fewer cards.