Most renters feel trapped within the walls of a house or apartment that isn’t even theirs. Your not even permitted to bang in a nail or two without hassle. If you feel like you’re stuck in a renter’s rut with no way of rising up and out of it and owning your own home, don’t feel trapped anymore. No matter how long you’ve been renting, or how insurmountable your financial situation may seem, there are some little known facts that can help you get over the hump, and transfer your status from renter to homeowner. With this information, see how you really can: save for a down payment, stop wasting thousands of dollars on rent, and stop lining your landlord’s pockets, and begin building equity in your own home with its own enjoyment and tax advantages.
YOU CAN BUY A HOME WITH MUCH LESS DOWN THAN YOU MIGHT THINK – There are local or federal government programs to assist people to get into the housing market. For instance, current FHA loans require a minimum down of 3.5%, while VA loans require 0 down. And in our service area in Snohomish and King Counties, there are numerous properties that qualify for 0 down USDA loans. In addition, various 1st time buyer programs and tax credits have been and continue to be available over time. And despite what you may have heard to the contrary, you don’t have to have anywhere near perfect credit to qualify.
YOU MAY BE ABLE TO GET YOUR LENDER TO HELP WITH DOWN PAYMENT & CLOSING COSTS – Even if you don’t have enough cash for a down payment, if you are debt free and own an asset free and clear, (such as a car for example), your lending institution may be able to lend you a down payment for your home by securing it against this asset.
YOU MIGHT BE ABLE TO FIND A SELLER TO HELP YOU BUY AND FINANCE YOUR HOME – Some sellers may be willing to hold a 2nd mortgage for you, in effect becoming your lending institution. Instead of paying this seller a lump sum for his or her home, you would pay monthly installments.
YOU MIGHT BE ABLE TO CREATE A CASH DOWN PAYMENT WITHOUT ACTUALLY GOING INTO DEBT – By borrowing money from certain investments to a specified level, you may be able to generate a significant tax refund that you can use as a down payment. While this is technically a loan, the monthly payment can be small, and money invested in both home and investment is yours in the end.
CLOSING COSTS CAN OFTEN BE ROLLED INTO YOUR MORTGAGE – Loan closing costs can average typically between 2 and 3% of your loan amount. Often, they are rolled into the overall price you are paying for the home. In a $200,000 home, for instance, you may end up with a 0 down mortgage of $205,000 including $5000 closing costs. Or, you may request that the seller pay them, in which case you have a $200,000 mortgage, with the seller paying your $5000 closing costs. In that case, the seller would end up with $195,000 for his property. (It is important to realize that with either scenario, you are financing your closing costs).
YOU CAN AND SHOULD GET PRE-APPROVED FOR A HOME LOAN BEFORE YOU LOOK FOR A HOME – It’s easy and will give you complete peace of mind. Lenders can give you written pre-approval at no cost or obligation, and it can even be done easily and over the phone. You will then know your monthly payment range as well as how much home you can afford. And, of course, with any offer you might make, your written pre-approval will be paramount to enabling you to qualify for the purchase.
