Wednesday, October 20, 2010
Stop Renting and Buy Your First Home
6 Little Known Facts That Can Help You Buy Your First Home
The problem that most renters face isn’t your ability to meet a monthly payment. Goodness knows that you must meet this monthly obligation 30 days already. The problem is accumulating enough capital to make a downpayment on something more permanent.
But saving for this lump sum doesn’t have to be as difficult as you might think. Consider the following 6 important points:
❶ You can buy a home with much less down than you think.
There are some local or federal government programs (such as 1st time buyer programs) to help people get into the housing market. You can qualify as a first time buyer even if your spouse has owned a home before as long as your name was not registered. Ensure your real estate agent is informed and knowledgeable in this important area and can offer programs to help you with your options.
❷ You may be able to get your lender to help you with your down payment and closing costs.
Even if you do not have enough cash for a down-payment, if you are debt-free, and own an asset free and clear (such as a car for example), your lending institution may be able to lend you the downpayment for your home by securing it against this asset.
❸ You may be able to find a seller to help you buy and finance your home.
Some sellers may be willing to hold a second mortgage for you as a “seller take-back”. In this case, the seller becomes your lending institution. Instead of paying this seller a lump-sum full amount for his or her home, you would pay monthly mortgage installments.
❹ You may be able to create a cash down payment without actually going into debt.
By borrowing money for certain investments to a specified level, you may be able to generate a significant tax refund for yourself that you can use as a downpayment. While the money borrowed for these investments is technically a loan, the monthly amount paid can be small, and the money invested in both home and investment will be yours in the end.
❺ You can buy a home even if you have problems with your credit rating.
If you can come up with more than the minimum down-payment, or can secure the loan with other equity, many lending institutions will consider you for a mortgage. Alternatively, a seller takeback mortgage could also help you in this situation.
❻ You can, and should, get preapproved for a home loan before you go looking for a home.
Preapproval is easy, and can give you complete peace-of-mind when shopping for your home. Mortgage experts can obtain written preapproval for you at no cost and no obligation, and it can all be done quite easily over-the-phone. More than just a verbal approval from your lending institution, a written preapproval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for. Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make the difference between obtaining a mortgage, and being stuck in the renter’s rut forever. Typically there is no cost or obligation to enquire.
For more information on real estate issues, visit my website at www.HomeLandSeattle.com