Buy Your First Home - Are you interested in buying your first home in North Olmsted or elsewhere in Ohio? Its easier tham you might think!
Did you know that in 2005, 43% of all first time home buyers used mortgage programs with no down payment?
A good mortgage professional can help find a loan program to make your dream a reality.One thing to consider when purchasing your first home is all the extra expenses. The hidden cost of homeownership. When renting you often don't have to pay for garbage collection, water etc. These are just some of the hidden costs involved.
You may want to consider Down Payment assistant program to help with down payment or closing costs when purchasing your first home. In addition to this you may ask for seller contribution of 3 - 6% for additional help. Your real estate agent can help you structure the contract.
With the many programs that are available to you as a first time home buyer, you should have no problems finding the right program for your buying needs. Your mortgage professional will be able to go over different options and inform you how to get your home purchase done with no down payment and zero out of pocket expenses.
The payment on your new home has tax advantages. Your payment could be slightly higher tha your current rent payment, but, because of tax advantages, you could actually be saving a couple of hundred dollars a month.
Many first time home buyers that do have the additional savings for a down payment and closing cost choose to use 100% financing options and seller contributions so they can save those funds for things like new furniture, remodeling or painting, land scaping, etc. Don't forget that once you own the home you will want to make it your own with some personal touches.
Many first time homebuyers purchase a home with a first and second mortgage. By doing this you can avoid mortgage insurance and you can purchase a home with no down payment. Your first mortgage will be 80% of the purchase price and the second mortgage will be 20% of the purchase price. The second mortgage will either be done as a home equity line of credit, a HELOC, or a second mortgage.
Saving for a down payment - You used to have had to put at least 20% down on homes. Today, there are many programs that dont require you to save money for a down payment.
There are many programs available that help you with your down payments. These programs are called Down Payment Assistant prgrams. Many cities also have grant money available if you meet the specific guidelines.
FHA insured loans only require 3% down payment and are very flexible about the source of your 3% down payment. Some FHA lenders will allow grant programs for the 3% down.
A gift of funds from a family member can often be used for the down payment. Both the borrower and the family member must provide evidence that the funds are a gift and no repayment is required. They must also show that the family member had the funds to give and they were not borrowed.
Saving for a downpayment may be unnecessary with the many loan programs being offered today. However, a downpayment may save you money in the long run because lenders associate higher risks to borrowers that have little equity in their home. The lender usually sets rates higher as the loan to value increases or they require PMI which is costly. So, a having a downpayment may mean more money upfront but may save you thousands of dollars in the long run.
There are many different strategies you can follow to save money. A simple one to start with is to shop around for insurance or some other monthly bill. Try and cut down on those monthly expenses then whatever money you would be saving by the changes you make put into a savings account. A similar plan can be used when you get a raise. What ever the difference is increase is in your paycheck, have automatically deposited into a different savings account.
You can use up to $10,000 from an IRA for a downpayment penalty free or most employers will allow you to borrow against a 401k plan if you do not have the necessary funds to put down on a mortgage but you may not need any money down if you have a satisfactory credit history or rent history.
Please call to discuss your options.
Another option for young couples to utilize for a down payment for a new home togher is to set-up a savings account and add it to your bridal registry. Make sure you keep a record of who contributes to the savings account, you will can include this as a gift fund for most mortgage programs, you will just need to show that no one who contributed has anything to gain by the purchase of the property, (the people who contribute can't be the seller, the mortgage broker, the realtors, etc.)
If you have never purchased a home before you can withdraw your 401k for the down-payment. You will not be penalized.
Homeowners Insurance for 1st Time Homebuyers - When purchasing a new home it is important to remember to include an average for a homeowners insurance policy.
Insurers offer coverage for a dollar amount or for replacement of the structure. If your home were destroyed by fire, you would be compensated for the loss of the dwelling, but not for the value of the land. This is because the land still has value- you can sell it or rebuild on it. If your homeowners insurance is for a dollar amount, that is usually the value of the structure and its contents on the day you applied for the insurance, regardless of the home's increased value since then. Replacement coverage would pay to rebuild the structure as it was.
A standard homeowners insurance policy includes different types of coverage. It includes:
Coverage for the structure of your home.
Coverage for your personal belongings.
Liability protection.
Additional living expenses in the event you are temporarily unable to live in your home because of a fire or other insured disaster.
Most lenders will require that 12 months of the insurance be paid prior to closing on the loan.
Homeowners insurance can be escrowed, included into your monthly payment, or you can pay it your self either monthly, quarterly, or annualy. When you are buying a house for the firs time keep in mind that even if you are escrowing your homeowners insurance that you will need to pay the first year upfront. The insurance payments that are being made within your monthly mortgage payment will go toward the next year's premium. Homeowners insurance is paid in advance for coverage, whether you pay it monthly or yearly.
How can I buy a home? - How can I buy a home is a very popular question that many people ask. There are many ways to buy a home. The reality of homeownership has increased among many Americans and grown at record highs over the past decade in particular. This is in part due to the record low mortgage interest rates we have experienced over the past number of years and partly due to all of the new mortgage programs that have become available. Most homeowners are now able to buy a home with little or no down payment. This is definitely helping to increase the number of people that are able to buy homes now. There are lenders out there for all credit types and all income types. So whether you have an 850 credit score or a 580 credit score obtaining a home loan with 0% down may still be a very realistic option for you. To buy a home you must first contact a mortgage advisor and find out what mortgage programs and size loan you can qualify for. This is your first step to realizing your dream of home ownership
So you think your credit is too bad to qualify you for a loan? No matter what your situation is, bad credit, good credit, lots of collections there is a good chance that a mortgage consultant will be able to qualify you for a loan. With tens of thousands of lenders out there with thousands of different mortgage programs there is a good chance that a loan can be found for you.
One of the questions every potential home buyer has on their minds is how much home can they afford. The quest to the answer begins with what size home your family needs, and what the going home price in the neighborhood is. Once those two questions are answered, an experienced loan officer can calculate how much mortgage you can afford, base on your current income, future outlook, and amount of savings. In most cases, your mortgage professional can often find a loan program, whether it would be a 15-year fixed rate mortgage, an Option ARM, a 5/1 Hybrid, or a 80/20 Piggyback, to help put your family in your dream home.
If this is your first home especially, you should work with a real estate agent that also does a lot of transactions with first time home buyers and 100% financing borrowers. Your mortgage broker will be able to refer you to an agent that works in these types of transactions.
Your second step will most likely by consulting with a trusted real estate agent or broker. Your agent or broker will be able to match your financial requirements to help you find your perfect home.
Even if you are considering buying a home with 100% financing you should plan on having at least two months of mortgage payments, plus closing costs (again another 3-6% of the purchase price) saved in savings, investments, or retirement accounts. Some programs will actually finance up to 103% of the purchase price to include the closing costs items too. Another way is to have the seller pay for the closing costs up to 6% of the purchase price. Your mortgage broker will be able to assist you in determining the best way to go about these important factors.
If you decide that you want a no closing cost mortgage you can either have your real estate agent write this into the offer to purchase or we can help you with a program that will allow for these closing costs to be added into the loan. In most cases it will be better for you to add it to the offer to purchase as there will be no adjustment to the rate.
