Options For Buying Your First Home...
By Heidi Herda, Herda Home Team - 612.807.4858 http://HomesSoldByHeidi.com
Keller Williams Classic Realty
There're many great reasons why homeownership should be at the top of your list, but the expense of home ownership keeps some people from taking the leap into home ownership. The current Real Estate market has seen it's bumpy slopes over the last few years, but the recent positive pricing, outrageously low-interest rates, and affordable homes makes now a great time to buy your first home.
- Investigate local, state, and national down payment assistance programs. These programs give qualified applicants loans or grants to cover all or part of your required down payment. National programs include the Nehemiah program, www.getdownpayment.com, and the American Dream Down Payment Fund from the Department of Housing and Urban Development, www.hud.gov. You can also connect with your neighborly credit union to discuss your local options and program qualifications or, you can start your quick application for approval, a helpful and experienced loan officer will get back to you with important information you need to know before you secure your loan program. You may reach him direct at, 612-798-7127.
- Explore seller financing. In some cases, sellers may be willing to finance all or part of the purchase price of the home and let you repay them gradually, just as you would do with a mortgage. This term is called a contract for deed, rent-to-own or rental with an option to buying. Please have the assistance of a well qualified Real Estate agent to review the terms of a contract for deed or rent-to-own option so your interests are protected throughout the writing of the contract. It's fairly typical to see a contract written for a higher interest rate in order to give the seller incentive to carrying the contract on your behalf.
- Consider a shared-appreciation or shared-equity arrangement. Under this arrangement, your family, friends, or even a third-party may buy a portion of the home and share in any appreciation when the home is sold. The owner/occupant usually pays the mortgage, property taxes, and maintenance costs, but all the investors' names are usually on the mortgage. Companies are available that can help you find such an investor if your family can’t participate.
- Ask your family for help. Perhaps a family member will loan you money for the down payment or act as a co-signer for the mortgage. Lenders often like to have a co-signer if you have little credit history. The term "gifting" or gift letter would apply to this scenario. Check with your lender for specifics on purchasing this way as there are special circumstances that apply and your lender may need the "gifted" funds to mature in your account, prior to being able to use those funds. Special instructions may differ depending on your letter, so ask up front.
- Lease with the option to buy. Renting the home for a year or more will give you the chance to save more toward your down payment. And in many cases, owners will apply some of the rental amounts toward the purchase price. You usually have to pay a small, non-refundable option fee to the owner. If you're currently in a rental situation and your lease is up for renewal, but you're considering owning, talk with your landlord, it's possible they're also considering selling and, in that case, this would be a win-win situation. Again, you may want to look to a Real Estate attorney or qualified Realtor to help facilitate an agreement with your landlord so your interests are protected during the transaction.
- Consider a short-term second mortgage. If you can qualify for a short-term second mortgage, this would give you money to make a larger down payment. This may be possible if you’re in good financial standing, with a strong income and little other debt. These programs have changed so talk with your lender about current options of a second mortgage or, possibly consider some of the down payment assistance programs as an alternative to a second mortgage.
For additional information on home buying, you may call direct at 612.807.4858, or you can visit more blog articles, from Heidi Herda, Herda Home Team with Keller Williams Classic Realty. Thank you for reading me blog, "Options For Buying Your First Home....!" HomesSoldByHeidi.com