Tips for First Time Home Buyers
Buying a home at a young age may seem like quite the task on hand, with plenty of extra expenses and other hurdles to jump through. In the reality of things, buying a home has never been cheaper with historically low interest rates and easier with internet access to learn about almost every step of the way. As a First Time Home Buyer, there are a number of programs and opportunities to help you, stay away from throwing your money away renting.
Saving Up For a Down Payment
Saving for a down payment can easily be planned out once you have an idea of how much you can afford, after getting a pre-approval from a Mortgage Lender. The key for saving up enough money, is to start well ahead of the actual purchase of your new home. Sticking to your plan within your budget you set for yourself will help you out tremendously on your path to purchasing a new home.
A good way to start with an automatic savings plan, is to ask your employer to send a portion of your paycheck into a separate savings account. If you don't have this option, you can withdraw money from your main account and put it into a separate savings account. The idea is to keep your money in a separate account so there is less temptation to spend it.
Low Down Payment Mortgage Programs
A very common misconception between Millennials is that, homes require a very large down payment in order to purchase. The truth is, there are many home loan programs that are available to anyone, that allow a very little to no down payment to help first time home buyers get into homes. The Federal Housing Administration (FHA), which is open to anyone, offers home purchase programs with as little as 3.5% down. If you, or your spouse are a veteran, you can even purchase a home with 0% down, while using the loan program of Veteran Affairs (VA).
How to Make a Home Even More Affordable
If you are concerned about a high monthly payment, there is an alternative for you. Buy a Multi-Family home (2,3,4 units), if you live in one of the units you qualify for programs from above (FHA, VA), which offers a low to no down payment. This allows you to collect rents for the other unit(s), and use that as money to pay for your mortgage. In some cases collecting rent for one unit is enough to pay for your entire mortgage, while you could possibly be living there for free while building up equity.
Starting the Home Buying Process
The first step in the process is to talk with a Realtor who can get you in touch with a Mortgage Lender, and get pre-approved so you know what price range you can start looking in. Ask the Mortgage Lender about any programs/grants that you qualify for.
Once you know how much you can afford the next step is to sit down with your Realtor and discuss your goals for your home purchase. Your Realtor will set up a customized home search for you based on your wants and needs. Your Realtor is not only there for you with an internet search, but also to get you inside of those homes, help with an offer and negotiations that go along with the purchasing of your new house.
Owning a home offers numerous advantages, including tax-deductions, building of equity, price appreciation, and a place that you can go every day and call your home.
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