Buying your first home is so exciting!
Congratulations on taking the first step: learning what to expect from the home-buying process.
While you may be feeling exhilarated, chances are you’re also a bit stressed out and overwhelmed.
Never fear — home-buying isn’t a solo task, and we can work together to build your team and find you the perfect place to live.
You’ll need a number of other professionals and advisers by your side. You probably already know you need a real estate agent, mortgage professional, but have you given thought to finding a home inspector? The quality of those you choose to work with will play a significant role in how successful, efficient and, most importantly, affordable your home-buying journey is. Don’t be afraid to ask lots of questions along the way.
Let’s get started: Know Your Rights!
The Fair Housing Act
Do you know about the Fair Housing Act? While you may have heard it in passing, you should know that it protects you from discrimination when you’re renting or buying a home, getting a mortgage, seeking housing assistance and more. The website for the U.S. Department of Housing and Urban Development has more information if you need it. The Consumer Financial Protection Bureau is another resource you can use while navigating home-buying. It was formed to ensure you’re treated fairly by financial institutions and companies.
Have Your Finances in Order:
Okay, so maybe you aren’t quite on the brink of buying a home just yet, but you still want to learn what you’ll need to do when the time comes. That’s where your finances first come into play. There are plenty of reasons you might feel like you’re not ready to buy. Are you afraid that your student loan debt will stop you? Do you have bad credit — or no credit profile at all? Or are you simply unsure where to start when it comes to saving for a purchase so large? No matter where you’re at, we can discuss solutions so you can fulfill your dream of becoming a homeowner.
Student loan debt, how does this affect you?
It may be less of an issue than you think. Plenty of people who are still paying off their student loans are also able to buy a house. One of the main things you should be thinking about is your debt-to-income (DTI) ratio. Even if your student loan is in deferment the government loan is still going to hold a payment against you when qualifying for a mortgage.
If adding a mortgage payment to your current debts — student loans, car loan, credit card payments, etc. — will eat up more than 43% of your income each month, it’ll be tougher for you to get approved for a home loan. We can discuss your situation together and figure out the best options.
· Saving for a down payment is often cited as a major hurdle for first-time buyers. Even if you’re in good financial standing, it may seem like an impossible task to save tens of thousands of dollars. But did you know that the typical 20% down payment you’ve heard of is far from your only option? It’s true. You could consider a government-backed loan. You may be able to get an FHA loan with a small down payment dependent on your credit score, while VA loans often require no down payment for active military, reservists, veterans and spouses. And if you’re in a rural area, you may qualify for a zero-down USDA loan.
· You could also opt for a down payment assistance program or use gift money from family members to help cover the down payment. The amount of gift money you can use depends on the loan type. And you’ll likely need signed documents stating that the money is indeed a gift, not a loan or anything earning interest.
· There are more traditional budgeting tips you could use to save up for your down payment too. Enabling automatic deposits into your savings account — scheduled right after paydays — is one hands-off way to save. Another easy way to amass enough for a down payment is to use apps that round off your transactions and either invest your money or add it to a savings account. It’s the modern version of putting your extra change in a piggy bank.
If you have a low score, don’t worry. It isn’t hard to overcome with a little time and effort. You should start paying off debts, and be sure to make all of your payment deadlines.
· If you don’t have a credit history, most financial experts suggest opening up a credit card and committing to paying it off in full every month. If you have to do that, wait a while before applying for a mortgage so you can build up your score.
· Don’t buy a new car, co-sign a loan for others or open up new credit lines during the home-buying process.
Location is often touted as the most important factor in your home search for a reason. Think beyond your commute and ask yourself lots of questions
· Do you want to be in a specific school district?
· How much street noise can you cope with?
· Are you looking for an established neighborhood or one that’s up and coming? How will that impact traffic, cost of living, property taxes and home values down the line?
· Do you want to be close to friends and family — or to restaurants, grocery stores and other amenities?
Consider the neighborhood around the home. In addition to asking yourself the questions above, you should also drive around and chat with a few neighbors to get some real-life opinions on the area. Make sure to visit the area on weekdays and weekends, as well as during the day and night to see what the community is like at different times.
Pay attention to how much work the home will need, if any. How much work are you truly willing to take on? If the home needs cosmetic updates, will you want them completed before you move in? If you fall for a fixer-upper, do you have a budget for renovations?
Consider your future plans. If you know you’ll be in the home for the long haul, make sure it meets both your current and future needs. Are you planning to have kids? Will your aging parents move in?
What is your first move:
Call a Mortgage professional:
A Mortgage Broker should be your first call. A Mortgage Broker has to be certified by both the state and federal government with testing every year and background checks.
Mortgage Brokers have lower closing costs and do not charge upfront fees.
Find out how much house you can qualify for by calling me.