Ever since the housing market collapsed five years ago, buyers, sellers and investors have been climbing their way out of the rubble. Things have improved a little, but it's clear we're not there yet.
Even so, there are signs of hope. Existing home sales are up by a large margin compared with the close of 2010. And for those with the cash, credit, and determination, there has never been a better time to buy a home or apply for a mortgage or refinance.
Mortgage interest rates are at all-time lows, hovering at or under 4 percent for a 30-year fixed loan. Last Thursday, Freddie Mac reported that mortgage interest rates matched the all-time low.
With some careful planning, a little research and a lot of persistence, you can avoid housing market misery in 2012, and come out on top.
Here are four best real estate moves you'll want to make this year:
1. Surround yourself with experts
No matter your goal - a first home, a refinance, reverse mortgage or the purchase of an investment property - you will need a little help from qualified professionals who can help you navigate the rough real estate waters.
Having a good experience starts with hiring someone who has been around this block many times before. So find yourself a very experienced real estate agent who can list your property or help you find the right new home.
But you'll also need to secure the services of trusted experts who can help you seal the deal. Look for a great mortgage lender, real estate attorney (especially if you're buying a foreclosure or short sale or are selling in a short situation), home inspector and tax advisor (for real estate investors).
Putting together the right team can go a long way toward helping you make sound real estate decisions in the coming year.
2. Know your credit score
As I suggested above, even those with a healthy credit profile can find securing a loan challenging in 2012. The wild days of mortgage lending, where everyone with a pulse got a loan, are over. Lenders are extremely (and perhaps overly) cautious, and your credit score has become a more important tool than ever in deciding upon interest rates and terms.
Start by going online to AnnualCreditReport.com, which is the only site operated by the three credit reporting bureaus (Experian, Equifax, and TransUnion). There, you can get a free copy of your credit report from each of the three credit reporting agencies, as required under federal law. For an extra $9 or so, you can purchase a copy of your credit report.
Or, you can visit a number of websites that will provide a free or low-cost copy of your credit history and score. If you don't like what your credit history or score looks like, you can make the decision to simply put off buying or refinancing and instead work on fixing your credit.
The key thing is to know where you stand before you negotiate.
3. Manage your credit for the long haul
In today's mortgage market, a credit score of 780 or above is considered optimal. But you should be able to get a mortgage if you have at least a 720 credit score.
If you're not there yet, there are certainly a number of steps you can take. Obviously paying your bills on time and in full is a key part of the process, but you should also act now to correct any errors on your report. If you don't have any errors on your credit report, you'll want to work to pay down existing debt as quickly as possible and make sure you don't have too many open lines of credit. (For some suggestions on how to fix your credit history, check out some of my posts on the Equifax Finance Blog.)
4. Not all loans are created equal
It may be tempting to sign on the dotted line of the first lender who grants an approval, but don't. Consider that in many cases, a mortgage is going to be a 15 or 30-year commitment, and make sure you're comfortable with the terms for the long haul.
I suggest you talk to at least four or five lenders before making your decision. In addition, vary the type of creditors you're researching: A major bank, a local lender, a credit union, a mortgage broker and online options. Each of these will offer a variety of different loan programs, at different price points.
In 2012, if you want to make the best real estate moves, you'll have to arm yourself with information. In order to negotiate and secure the best deal, it is important to know what the competition will offer.