Buying a home in your future? Read this first!

Stuck on the rent train and trying to derail into home ownership city? Well you’ve got some options. Home ownership, a rewarding yet strenuous process is not an overnight thing. Unless you win the lotto or your 10 game parlay finally hits, that would be super sweet. Anyways, back on track. To get to into the position of being able to buy your home it is best to do so step by step. Don’t overwhelm yourself with A-Z when you need to be focusing on A-G first. In real estate you want a Realtor that not only knows the market, but knows the programs that will help you achieve home ownership glory.  In this article I will be concentrating on what you can do to better your situation and the different programs available that many people don’t know about. Knowledge is power, and here is your fuel.

A-G. The basics. Credit scores, save save save and pay off that debt! But seriously, pay off that debt. When you’re trying to obtain a home loan it is critical that your credit score be at it’s best. Otherwise you’re looking at higher interest rates and lower approval numbers. You have to crawl before you walk, which means paying off the most debt possible and decreasing your debt to income ratio to the best number you can. What is debt to income ratio? Simply, it is what you earn vs. what recurring payments you have. Credit cards can be good for building your credit, or just totally wreck your day. Don’t fall behind on your payments and keep the smallest balance possible. Simple things like these help your credit score get to a super fantastic number that will make you dance. No credit is better than bad credit so don’t let that deter you from pursuing your path to home ownership as well. If bad credit is holding you back, don’t be afraid to call the credit union or whomever had you in collections. Simply reaching out and talking to someone can get something removed from your report which is better then nothing. You don’t know unless you try.

H-M. Save everything you can, you may have to sacrifice some things but the juice is worth the squeeze when it comes to owning your home. I can go on all day about this this and that on how you can save money but for the sake of not losing your interest I will move on. Just remember, build and maintain solid credit, save everything you can, pay off as much debt possible.

N-S. Programs that will help you. Ok, so your credit score is good, you paid off a car or something and you’ve got some money in the bank. You’re ready to get this damn house already. A’lot of people have this misconception that you need a 10% or 20% down payment for a home. Nah. There are certain programs out there offering no down payment options. Although possible to obtain, they are usually restricted in areas you can buy and even the homes within those areas. No down programs require a lengthy process to obtain, and have many moving parts and restrictions. A’lot of times people go through the process of no down programs to end up with a very weak loan when it comes to offers they are up against in the home market. If that is your only option, just be prepared for some competition and time. Of course the more you put down on a home, the better your mortgage payment will be. If getting that 10, 20, 30 or whatever % down is just a time frame that doesn’t work for you. There are 3% and 5% down CONVENTIONAL loan programs available. Yes, your mortgage will be higher until you can refinance, but you own your home now and that’s what this article is about. As long as you’re still improving your situation and working at your finances, refinancing will be able to help you lower your payment as well. So like what the hell does conventional mean? and FHA while we’re at it. Without boring you with loan talk and losing the remaining audience,  remember this. Conventional loans are chill and FHA loans are chill but not quite as chill. Not only do conventional loans typically offer lower interest rates, but things like unpermitted construction (even if it’s up to code) are more likely to rain on your FHA loan than conventional. Don’t get me wrong, oodles of homes are sold via FHA loans so it’s not like the worst thing ever. But shoot for conventional, or cash, but if you have the cash to buy a home you’re probably not reading this article. If you’re a vet, check into the VA loans. Those also offer no points and no down payments and are more in line with a FHA loan.

Q-Z Time to score your dream home. So you’re in that spot, you know the loan type you are aiming for and are ready to do an application. These are very important steps for home buying. Make sure you get your approval number before starting to see homes. Otherwise you may find yourself wasting a lot of time looking at homes below or above what you should be looking at. If you have hung around this long, good luck in your upcoming adventure ahead. For more in depth tips and help or any questions please feel free to contact me anytime.

For a more detailed description of available loan programs, click on Eileen Snyder from Wells Fargo’s link below.

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