Florida – As stated before we expect in 2012 home prices to continue to fall additional 3-5% while home supply still out weights the demand for homes in the Florida real estate market.
The flat housing market will be continue over the next several years and it is the best time to clean up your credit and re-establish your financial stability.
After a foreclosure it is more important than ever that you establish a good credit when buying your next home. When you take the time and establish a good credit it will allow you to buy your next home with a minimal down payment and the lowest interest rates on the market available. You need a plan and discipline to establish your goal of home owner ship.
If you lost your home to foreclosure or a short sale, now is the time to get you back in a favorable position for your next home purchase. It needs some time, work, discipline and don’t loose hope and focus on your goal-owning a home again. Many finical institution will consider your new loan application after three years of good credit records.
Her is what you should consider to do:
Fix your credit
- It is important that you start to make as many as possible payments on time. Not only on your credit cards, but also on everyday bill like utility, waste, cable etc.. If you still have other debt obligation it is more important than ever to make those payments on time. On time payment will boost your credit score. The more on time payments you have the faster your credit score will rise.
- If you still have a credit card with a balance try to pay the balance down. But don’t pay it down and leave it at zero balance. Try to use it and pay it off right away. Don’t close credit card account, that will influence your credit score negative, while you loose “credit” available to you and will lower your score.
- While most all home buyers programs require a down payment, now is the time to start saving for it. FHA loans require a 3.5% down payment and allow sellers contribution for closing cost up to 6% as of the day of this writing. Example if you want to buy a home and need to borrow $100,000 you need a $3,500 down payment. Also consider closing cost which you have to pay if the seller is not willing to contribute. Closing cost are between $4,000-$5,000 in Florida per $100,000. Now it should be easy to figure out how much you have to save each month for the next 3 years so that your down payment and closing costs are covered.
- Saving money also means saving for an emergency. You should consider to have at least 6 month living expense save up. This emergency fund is to be used only when you are out of work or loose some income for what ever reason. This emergency cushion should bring you over hart times you may face in the future. Save this separate to your down payment and closing cost.
Don’t buy what you can not afford
- You have built your credit score up over the past 3 years don’t ruined with an impulsive buy. Good deals will stay for some time and you will have time enough to buy out of an educated decision.
- Buy only what you can afford and you feel comfortable with paying every month. Many lender will approve you for a higher amount but stick with your plan. Lenders will per-approve you on your income/ debt ratio but not considering g other living expense you may have. so it is up to you take figure out what monthly budget you can afford overall.
If you stick to your plan and follow the recommendation you should be able to buy a home three years after a foreclosure or short sale. Many lending institution will allow you to apply after three years when you have good credit, maintain your credit and have a one time credit profile. Therefore it is important that you rebuilt your credit after the hart realty of foreclosure.