If you—or someone you know—is still on the fence about homebuying today, don’t wait. We’ve heard lots of excuses in recent years. Not enough down payment? Credit score too low? Can’t qualify with a foreclosure (short sale, bankruptcy) history? Too much debt (especially, student debt)? Rates too high? Loans too expensive? Don’t know where to start?
All of these worries can be—and are—overcome with time and determination.
Don’t be walled in by old assumptions when it come to homebuying. In this market with low rates and little down payment you owe it to yourself (or share this info with friends/family members) to discover exactly how to own a home.
With Oakland County seeing the lowest inventories in some time (as low as 4-6 months) it is time to be ready when your dream home finally hits the market. Homebuying is process and once you start the process things will fall into place.
It isn’t difficult. All you need to do is take the first step to contact a local real estate pro—like us—or a mortgage lender (we can refer you to several top-notch options). The only thing holding you back is making that first contact. Keep reading. You may be surprised to learn the real truth behind the myths that stop many from homebuying in our local real estate market.
I don’t have any money for a down payment. Even if you don’t have a chunk of change lying around, you might have family—or friends—who are willing to give you money for a down payment. Get gift letters stating that the cash is a gift and doesn’t need to be repaid and your down payment problem is solved. Or, ask a relative to invest in the property as a co-owner. Your relative puts up the down payment. You make the monthly payments. You both split any profits at sale.
My credit score isn’t good enough. You don’t need a super-high credit score to buy a home. In October 2014, the average FICO score for all types of closed/settled loans was 726. For FHA loans that figure stood at 683.
Interest rates are too high. Historically speaking, interest rates on mortgages are still very low. The bad news is, rates will eventually rise and that could put homeownership out of reach—if you continue to wait to buy a home.
I have savings, but I still don’t have 20% to put down on a house. You don’t need a huge down payment to buy a home today. Sure, 20% is a great down payment, but you can still get a loan with 5% down for conventional loans and 3.5% down for FHA loans. Some new loan programs allow as little as 3% down again. Let us show you the new math.
I have too much student loan debt (or other debt). If your debt is manageable and you’re making monthly payments to lower it, you aren’t automatically disqualified from getting a home loan. Speak with a lender to determine how your income and debts compare and if there’s room in your budget for a mortgage payment.
Loans are too expensive. Lenders charge fees to originate and process your loan and fees vary. They are required by law, before you agree to a loan, to provide a Good Faith Estimate (GFE) of all their charges. Different loan programs have different costs, so compare loans—and lenders—to find out which fits your budget best.
I can’t afford to apply for a loan. Most lenders do not charge for “running the numbers” to determine if you can qualify for a mortgage. During pre-qualification, lenders use general figures you provide to present a rough estimate of how much home you can afford. Pre-approval, in which lenders determine exactly how much home you can afford based on specific information—such as tax documents, paystubs and bank information you provide. Pre-approval is also often provided with no obligation by many lenders. Take the first step. Find out what you qualify to buy—it won’t cost you much more than time.
I don’t know where to start. As your local real estate professionals, we make it our business to answer your homebuying questions, help you determine if you are able to buy a home…and then find the right home for you. Contact us at any time. We would love to discuss your situation and find out if we can make you a happy homeowner!Free Homebuyers Guide