One of the biggest obstacles for first time home buyers is getting their credit in order and having a big enough down payment to get their first home. One of the things I tell people is in order to know what you need, you need to have a finish line or you will be running forever! You see, when a runner goes out for a race, he knows where the finish line is. He doesn't just start running or he would get lost a long the way and never finish!
I feel this is the same result most first time home buyers run into, they start the race, but they don't know where the finish line is, and they keep running and running until they give up! I don't want this to happen. I think the American dream of owning a home is a great one and I want to be able to help people visualize the
finish line and actually help them reach it.
One of the things I do for people that think they are ready for home ownership is I sit them down, and talk to them along with a mortgage broker. First thing we do is find out if they are qualified to purchase a home and in what price range. If they are not ready to purchase with a traditional mortgage then we discuss the option of purchasing with a lease option or owner financing, but you still have to be able to make the payments.
Then we start to put the finish line in place! If you are on a lease option or owner financing, or you just decide to wait until your credit has been improved, we need to start your training so you can reach that finish line. I help you by deciding what your dream home is...We take that picture laminate it and have you put it on your bathroom mirror, this is the finish line! What it takes to get to that finish line is the course map and no runner goes out to a race with out knowing the course to get to the finish line, and with my help either will you!
We first figure out what your monthly payments would be on your dream home and figure out if you can afford that. If you can, then we figure out how much down payment is needed to purchase that dream home. Then we set up a budget that pays you first then all your other bills. The biggest money makers in the world take a check when they receive it and pay themselves a certain portion and then live off the rest. You are going to do the same thing and that portion that you set aside will become your down payment at the end of your race to home ownership.
By doing all this you are setting yourself up for a successful home ownership experience. Not only will you have your down payment, but you've taught yourself to save, and when something big comes up during the process of homeownership, you won't be left with nothing in savings in the future, if you continue the discipline that you taught yourself during the time up to owning your first home.
The biggest mistake I see with most people that call me about foreclosure is they had no reserves, and when something such as a medical bill or car repair came up, it was either fix the car or pay the mortgage and the car was what gets them to work, so they skip the mortgage payment thinking they can catch up next month and they never seem to do, and they end up losing the home.
So, set your finish line, train for it, and reach it in the time you set for yourself. You can't go wrong if you continue to do it after home ownership, and then you won't have to worry about problems in the future either.
See you at the finish line!
Todd Clark - broker
Kastings & Associates