Think Home Ownership Is Out Of Reach? Think Again
Looking at home prices can be discouraging for many first-time buyers who may struggle to raise the funds for even a good down payment. But there are a few things to know when looking at homes for sale that could put buying well within your reach.
Check Out First Time Buyer Programs
Some lenders have special programs for first time buyers with exceptional credit scores. They will allow you to have lowered monthly payments, despite putting down a lower monthly payment. The programs are also designed to be educational to would-be buyers who need help evaluating loan offers and navigating closing costs and other parts of the real estate transaction.
Consult a Real Estate Company
A real estate company agent will be able to help you size up your home-buying budget and find a home that's comfortable within your mortgage approval rate, while still giving plenty of bang for your buck. When you're working with a smaller budget, the most important thing is to know what is most important to you in a home; in other words, keep your list of essentials small.
Consider Making a Smaller Down Payment
What trips up many would-be buyers is the amount of down payment they think they need. The standard amount for a down payment that you will hear advised is 20%. But if you can't raise that much money, note that there are programs that will take as little as 5% down payment. If you qualify for an FHA loan, that number could be as low as 3.5%. Of course, consider that this could mean your monthly payments go up, due to higher interest rates and the need for PMI insurance. It's obviously better to put down the highest down payment you can, but this advice is just to help you realize that if you're very eager to own a home, you can do so without the 20 percent.
Consider Choosing an Up and Coming Neighborhood
The trendiest neighborhoods may be out of reach for first time buyers. But there is opportunity in this as well. If you buy a home in an area where other young home buyers are looking, you could be part of creating a community that changes the real estate market in your town. In ten years' time, your neighborhood may increase in value significantly, making this one of the smartest real estate investment methods you can choose.
For more information, talk to a company like Homestead Land Co.