New Year's Resolution: Plan for a Home Purchase

The second most popular choice in our New Year's resolution poll is about preparing for the world of real estate and mortgages. As of this morning, more than 19% of you chose "Plan for a Home Purchase" as a top resolution for 2007. And no wonder: With home prices softening and mortgage rates still very low, this is a great time to consider buying. Here are some resources and tips to get you started on your home buying resolution:

• Start with the basic. Credit.com has a free Home Buyer Boot Camp article that outlines the whole process from real estate agent to inspection in five steps.
• Work on your credit. Your credit scores play a big part in mortgage underwriting. Scores over 700 will help you get the best deal available. All three of your scores will probably be checked, so it makes sense to know where you stand before you apply. If your scores need a boost, you should start about 3 months before your application and follow these steps.
• Find a real estate agent.   Your agent should be a trusted partner during the home buying process; take some time to find one you really like. We've put together a list of good questions to ask a potential realtor and this free real estate agent finder tool can help you compare rates.
• Compare mortgage options. A good broker can help you pick the loan that works best for your situation, but it makes sense to read up on the different types available on your own as well. Read about the most common types of mortgages.
• Reduce your debts. Mortgage lenders will look at your debt-to-income (DTI) ratio as part of the underwriting process. Aim to have this ratio well below 30% to qualify for the best deals. You can read about improving your DTI and loan-to-value ratio online here.
• Ask questions. Don't be afraid to ask a lot of questions during the home buying process. A good real estate or mortgage professional should be glad to provide you with answers. Credit.com's mortgage expert, Randy Johnson, has years of experience as a broker in southern California and loves helping consumers. You can read his articles online here or ask him a question directly at mortgageguru@credit.com.

Questions or tips about buying a home in 2007? Share your feedback in the comments section below.