As we all know, there’s a good deal of anxiety out there for first time home buyers. Home ownership is a major investment and isn’t something to be taken lightly. This one of the most important financial decisions one can make…and it will have a long term effects in building wealth.
It is never too early to start planning for your financial future, including that first home purchase.
There are some serious benefits to home ownership, to be sure (and you can find out more on that here…).
However, there are a few things that young homebuyers frequently fail to consider when starting the home buying process.
Let’s take a look at these key facts…
The Home Buying Process Begins With Mortgage Pre-Approval
Before you start looking for that dream home, would-be buyers need to have a good understanding of their overall financial position. This means having financial information readily available, such bank, savings, and investment statements.
You might want to check your credit score via a free, online site. While it won’t give you the exact score, it will give you a good idea of what to expect. More on that here…
It’s important to konw that mortgage interest rates tend to be higher with lower credit scores, which can dramatically affect the total costs associated with a new home purchase.
In general, saving for a down payment is sometimes viewed as one of the biggest obstacles for homebuyers, but that does not have to be the case. There are a wide variety of down payment options available – from 0% to 20%+! You can find out more on that here…
Home Ownership Becomes Less Affordable the Longer You Wait
With mortgage rates starting to rise along with home prices appreciating, putting off buying a home now could cost you much more later.
Sam Khater, Chief Economist at Freddie Mac, recently noted, “As the economy progresses and inflation remains elevated, we expect that rates will continually rise in the second half of the year.”
Most experts also forecast interest rates will rise in the months ahead, and even the smallest increase can influence your buying power. So, if you have been on the fence about buying a home, there really is no time like the present to purchase one.
Do you think you might be too late and have missed out on purchasing? Not at all! You can find out more on that here.
Know What You Can Afford and Your Mortgage Options
Some young homebuyers are unsure they can actually afford a mortgage payment for a home that suits their growing needs.
Fortunately, there are a multitude of options! For example, the Federal Housing Administration (FHA) loan for first-time buyers (and a minimum 3.5% down payment). Or a VA loan backed by the Department of Veterans Affairs (if you qualify), along with other home loan programs available to you.
What’s more, many buyers may be able to afford more home than you think. It’s important to work with a mortgage professional who can help analyze the different programs to find one that suits your individual needs.
Knowing how much home you can afford and understanding the current market when starting the process are musts—and could be just what you need to stop renting and start buying.
Would you like to find out more? Contact me to discuss your current situation and how you might be able to take advantage of today’s real estate market. It would be my pleasure to help you!
