You want me to buy a house?
I love living in a house! Don’t know anything different, so when it came to finding a place I would lay my head at night, I opted to purchase a house. Especially when the government reimbursed first-time homebuyers a credit up to $8000(back in 2008-2010 Marbys,sorry!). I was like, yes, please sign me up! It is true what they say buying a house is one of the most significant purchases you will make in your lifetime. I put it up there with college tuition, wedding, buying a brand new car. Let’s get into it Marbys! Knock! Knock! Who is it?
A Realtor?
Is a person licensed and trained to help you find your home sweet home! A good one is to be a guide through this new adventure and advise you on what you should or shouldn’t do. They may even have insight as to various programs you can take advantage of as a first-time homebuyer. These courses teach you how to make this purchase and help you maintain a healthy monthly budget, home warranties on appliances or structure of the house, and suggests referrals to local contractors for any repairs or if you decide to complete an overall makeover for your home. Your realtor will listen to your needs for a home and advocate for you. A good realtor is a key to your home sweet home.
Show me the Money!
Loan officers can be a bit confusing, but they have your best interest. Coming from the financial world, I have seen many loan officers who worked tediously on behalf of their clients, and because of the efforts they put in; many home closings procedures were smooth sailing. That banker may then be referred to friends and family or considered for the client’s next purchase, if available. Loan officers don’t just ask you to provide all your proof that you can buy a home, they work with the numbers, and it is in your favor in many cases. If your realtor cannot refer one, you can always visit your neighborhood bank or credit union, which will get you connected to one.
Seriously? How much house can you afford?
Pre-approval is a document generated using your credit score, income, and maybe a few other numbers to let you know how much house you can buy. This is an essential part of buying a home, and most banks do not take you seriously unless you have one. It also can be used as a guide for your monthly mortgage payment. You may be able to pay a $1500 monthly payment, but do you have to? And in some cases, your first home may not be your forever home, so consider saving on this home to get to the next one.
FHA or Conventional loans
Then there are FHA vs. conventional loans. FHA loan, the government has your back. Down-payment is 3.5%, and your fico score is 580 or higher. This works best for buyers who may not have enough saved for closing costs or maybe experiencing credit issues at the time of purchase. But, it is the government, be on the lookout for some “rules” or maybe “guidelines” (might sound nicer) that you will have to follow to qualify for an FHA loan.
Not the same with a conventional loan! Coming in with a credit score of at least 620, a buyer can pay a down payment of 3% and follow less rigid guidelines in acquiring this loan. My first mortgage was FHA approved, but when I refinance several years later, my new loan was conventional, thus avoiding any FHA monthly insurance fee being applied to my mortgage payment.
Where?
Location Location Location research the area you want to live in. Nowadays, you can buy a home in a different state from where they currently reside. Therefore, research is a must! In order to know the ideal spot, you would like to pull up to after a long day of work or an area which may be on a bus/train route. It is also nice if your home can be close to your job or not too far away from family or friends.
Cities bring numerous activities for you to be a part of; if you are a social butterfly or like to see all the city lights at night, a major city can be fun to live in. Suburbs or “living in the country, also known as “living behind God’s back,” provides a more relaxing atmosphere. With land, bedrooms, and bathrooms sizes to be admired!
I think I can buy a house
Good! Now let’s review; a Realtor is your house buying guide, the loan officer tells you how much house you can get; along with what type of mortgage loan you will need. Pre-approvals are great and help you create a monthly budget that way you are not using your entire paycheck to pay your mortgage. Different loans for different folks; but FHA & Conventional are most common. Make your choice between the city, suburbs, country or somewhere in between. Remember your first home may not be your forever home, but it can be a great investment for the next! Buying a house is a big deal! Whether it is new construction, filled with character, or tiny. All are out there just waiting for you to make one your home! Check out today’s bell for this article!
Sources:
https://www.nerdwallet.com/article/mortgages/fha-loan
https://www.nerdwallet.com/article/mortgages/conventional-loan-requirements-guidelines
