Despite the interest rate hike, 2017 looks to be the year to buy for many young renters hoping to become homeowners. The concept of buying your first home is exciting, but the reality of it can be terrifying. Overwhelming amounts of student loan debt and higher rent rates have slowly crushed the home-buying dreams of many Millennials. However, there is hope in sight. Here are a few key tips to help you get there.
1. Build great credit.Of course the objective when securing a mortgage is getting the lowest interest rate possible. This relies heavily on your credit score. Paying your bills on time, paying off credit cards, and consistently contributing to your student loan debt will all help strengthen your credit. Order a copy of your credit report before you start applying for a mortgage so you aren't caught off guard if your score isn't where you expected it to be.
2. Aim for a large down payment. Try to avoid committing anything less than 20 percent. The reason here is twofold. First, if you put less than 20 percent down, you have to pay private mortgage insurance. Second, the less you're willing to put down, the lower a lender's confidence will be in your ability to pay off the loan. Therefore, your interest rate will likely be higher and the amount they offer to lend you may be lower.
3. Research all the additional costs. Buying a home doesn't just boil down to a down payment and mortgage. Unlike renting, there are added costs associated with buying and owning a home such as: a transaction coordinator fee, home inspection fee, homeowners insurance, home warranty, closing costs, and ongoing maintenance costs. Educate yourself as to how much you should expect to pay above and beyond the price of the home.
Mortgage capacity, you're ability to afford a certain amount for a home based on your debt-to-income-ratio, is the most important part of buying a home. If a lender finds you to be a risky investment, buying a home may be out of reach. Continue to strengthen your credit and save, save, save. The pay-off will be worth it in the end when you find yourself in your first home.
Author:Kurt Galitski Phone: 714-957-6677 Dated: January 25th 2017 Views: 277 About Kurt: After 15 years of founding and running a successful boutique real estate office in Costa Mesa as a l...
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With seven consecutive years of five-star status in Orange Coast Magazine, The Kurt Real Estate Group is among the elite. No matter where they’ve gone, they’ve set record sales. Whether you’re a buyer, seller, or investor, Kurt and his team work diligently, honestly, and with the utmost professionalism and are passionate about helping you achieve your real estate goals.
Kurt is ranked among the top two percent of Coldwell Banker agents nationwide. Kurt’s experience investing in and flipping homes and his connections with the Hollywood Film Industry give him an unparalleled edge and keen insight into market trends. The opportunity presented to you in working with Kurt is why The Kurt Real Estate Group is recognized as one of the top real estate teams in Orange County.
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