My blog provides awesome tips for buyers and sellers to help save time and money, while keeping you informed along the way.
Its been a few years since you graduated High School and decided to be on your own or you graduated College and moved back into your hometown. Now its that time of year to renew your lease or find a new one, but wait you do have another choice to BUY!
I'm sure you ask yourself every year "should I keep renting instead of buying?" but you get cold feet, don't know where to satar, and of course is it the "right time" and you just renew your lease. Well let's start off with your cold feet, this is normal especially with a big purchase, just take in a big breath and call a local realtor to help walk you through the steps. Second You don't know where to start, you're checking out zillow, flood zones, taxes, running numbers, and PMI, WHAT'S PMI!? All of this can be extremely overwhelming especially if it is your first time, this can be solved like the first problem by contacting your local Realtor and they will explain everything. Third is it the right time, this can a lot of different things do you have the down payment, is your credit good enough, or even your move in date, let's talk about a few of these.
Credit: A great misconception is that you need to have great credit score (700+) well not necessarily, yes it helps but it is not a must. This really depends on the loan type, lender, and a few other things, I've even seen lenders that can give someone a home loan with a 520 score and 10% down payment and a 580 score with a 3.5% down payment. This should be the first thing you do call your Realtor and ask them to get you in contact with their prefered lender, this way you can see exactly where you stand.
Downpayment: I've heard "I dont have the 20% down payment that is required to buy a home" not all home loans are the same so not all down payments are the same. Even if you get an FHA loan with 3.5% down payment you can still ask your lender if you qualify for Down Payment Assistance and make it even lower for you.
The Market Is too Expensive: My pet peeve "Well my friend/family member bought their home 10 years ago for $60,000" even if it is true good luck getting the market to reflect what it was 10 years ago. Don't let others statements about the market keep you from becoming a homeowner, while you are waiting for the market to "drop" let's look at how much you are wasting. For example: You see a home for $110,000 (2B/2b/1,200sqf) that you really but you want to wait until its $90,000 (more than likely that home won't be available any more even it the market does fall but lets keep going) Lets say your down payment with an FHA would be 3.5% ($3,850), another $5,000 for closing cost, and your monthly payment at $1,000, for three years you have spent $44,850. Now keep in mind some of that money is equity that you in own in that home so now your starting to create wealth! Now lets look at your rental for three years if home / apartment $1,200 (2B/2b/1,200sqf) a month (Low end), app fee $50, and Security deposit $1,200, you move two out of those three years. Now COUNT IT UP COUNT IT, you're looking at $45,700 in a place you will never own and never get any return on your investment. So when is it the right time to buy? I'll let you decide but I believe the numbers speak for themselves.
If you have any questions i'm here to help!
Jovani The Realtor