If you're currently renting and thinking about buying your first property, I have some advice. And, you may not like it...but, you need to know that times have changed.
The Federal Housing Administration or FHA is a governmental organization which underwrites loans to buyers. They require that the buyer put down 3% of the purchase price in addition to closing costs. So, if you're interested in purchasing a $200,000 condo you'll need at least $6,000.
But...what about those no-money down loans? Gone. With all the talk these past two week regarding the sub-prime lenders folding, several major companies (Fannie Mae and Freddie Mac) have decreed that buyers will need 3 to 5 percent down.
So, what can you do in the meantime? First, you might want to check your credit report and make sure that it's accurate and see if there are ways to improve it. Second, set up a savings plan. Do you really need that Starbucks every day? Just start putting money into a money market account which should be paying interest around 4.5% or higher. Separate those funds from your regular checking account. If you don't see it, you wouldn't be tempted to spend it.
Third, talk to several loan officers. See what programs they offer. Find out what you're eligible for. Then start learning and exploring the market. You can view listings on-line to get a feel for areas and sub-divisions. (Contact me if you'd like to receive listings in your email in-box.)
Take a drive out to the areas you think you like. Just look around. Are there high wires nearby? Does the train go thorough the backyard? Is the property on a busy street? Once you've done this, you now know what areas or sub-divisions appeal to you. Convey this information to me or your REALTOR. And, start a plan of action with the end result that you'll become a homeowner.
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