First time home buyers
Georgia and particulary Rome is a very popular place to move because of the availability of hospitals, public and private college, and he numerous businesses moving to the area. Homes sale fast, so if you want to compete you have to be prepared. Here are some ideas for preparation.
1. Save for a down payment
Here are a few options if you are looking to get away from that 20% down payment offered at banks
Conventional mortgages They conform to standards set by the government-sponsored entities Fannie Mae and Freddie Mac, and require as little as 3% down.
FHA loans Loans insured by the Federal Housing Administration permit down payments as low as 3.5%. Minimum Credit Score 570
VA loans Loans guaranteed by the Department of Veterans Affairs sometimes require no down payment at all. They also help with the down payment. Estimated minimum credit score is a 640
Making a higher down payment will mean having a lower monthly mortgage payment.
If you want the smallest mortgage payment possible, opt for a 30-year fixed mortgage. But if you can afford larger monthly payments, you can get a lower interest rate with a 20-year or 15-year fixed loan. Use a calculator to determine whether a 15, 20 or 30-year fixed mortgage is a better fit for you.
2. Research state and local assistance programs
In addition to federal programs, many states offer assistance programs for first-time home buyers with perks such as down payment assistance, closing cost assistance, tax credits and discounted interest rates. Your county or municipality may also have first-time home buyer programs.
Georgia offers the Georgia Dream- All borrowers eligible for a Georgia Dream mortgage may qualify for $5,000 in down payment assistance. It’s possible to receive $7,500 if you are eligible for either the PEN or Choice programs.
3. Check your credit and stop any new activity
When applying for a mortgage loan, your credit will be one of the key factors in whether you’re approved, and it will help determine your interest rate and possibly the loan terms.
So check your credit before you begin the home-buying process. Dispute any errors that could be dragging down your credit score and look for opportunities to improve your credit, such as making a dent in any outstanding debts. Some lending institutions will tell you the best debts to pay down, so that it will increase your score faster.
Avoid opening any new credit accounts, like a credit card or auto loan, until your home loan closes.
4. Determine how much home you can afford
Before you start looking for your dream home, you need to know what’s actually within your price range. The best option is to get pre-qualified through the lender of your choice.
5. Get a preapproval letter
After you get pre-qualified for a mortgage, which is just an estimate of how much a lender may be willing to lend based on your income and debts. In the pre-approval process a lender thoroughly examines your finances and confirms in writing how much it’s willing to lend you, and under what terms.
6. Ask about the mortgage rates
Get a quote from more than one lender. Comparing mortgage rates from at least three lenders can save you money.
Ask if you can buy discount points to lower your interests rate.
House shopping tips
7. Hire a buyer’s agent
A buyer’s agent does not cost any extra, but can save you a ton in time and money. It will be key in negotiations, looking at houses when you have time, and making sure processes such as inspections, paperwork go smoothly. The right buyer’s agent should be highly skilled, motivated and knowledgeable about the area
8. Keep an open mind
Most people start their search with a single-family home. Depending what the future holds for you there may be a better fit for different individuals. Condos and Townhouses offer the same amenities but offer less upkeep for those busy people.
Also: Research the neighborhood.
Research the quality of nearby schools.
Look at local safety and crime statistics.
Map the nearest hospital, pharmacy, grocery store and other amenities.
9. Stick to your budget
Look at properties that cost less than the amount you were approved for. It’s the ceiling — and it doesn’t account for other monthly expenses or problems like a broken appliances that arise during homeownership.
In a competitive real estate market with limited inventory, it’s likely you’ll bid on houses that get multiple offers. Stay firm shopping below your preapproval amount creates some wiggle room for bidding. Stick to your budget to avoid a mortgage payment you can’t afford.
Here are a few of the most common pitfalls of fist time , along with tips to help you avoid a similar fate.
10. Closing costs
In addition to saving for a down payment, you’ll need to budget for the money required to close your mortgage, which can be significant. Closing costs generally run between 2% and 5% of your loan amount.
11. Moving expenses
Once you’ve saved for your down payment and budgeted for closing costs, you should also set aside a buffer to pay for what will go inside the house. This includes furnishings, appliances, rugs, updated fixtures, new paint and any improvements you may want to make after moving in.
12. Prepare for the future
If you plan to start or expand your family, it may be preferable to buy a larger home now that you can grow into. Consider your future needs and wants and whether the home you’re considering will suit them. Make sure it is close proximity to your jobs, make sure it has enough room or change rooms to bedrooms if needed.
A lot can be up for negotiation in the home-buying process, which can result in major savings. This is where an experienced agent comes in handy. Major repairs can be covered by the seller unless the price already reflects that or by giving you a credit adjustment at closing?