These five checkpoints can help first-time buyers to strike the right housing match. Bankrate.com recently published an article that offers first-time homebuyers these insights regarding today’s housing market:
- Check out FHA loans, which are still available and feature a minimum down payment of only 3.5 percent of the purchase price. In some areas, watch for the “$100 down” program for an even more economical down payment. If a substantial down payment is available, review the option of a conventional loan with PMI (private loan insurance).
- Qualifying for conventional financing can be tough, including the down payment. If you are a first-time homebuyer, be sure to do an online search for “first-time homebuyer incentives.” There are numerous programs designed to put home ownership within your reach. If you have military ties, there are outstanding programs designed especially for the men and women who are serving or have served in the armed forces.
- Read the lender’s GFE (Good Faith Estimate) and challenge any questionable fees. Compare the GFE to the HUD1 closing document 24 hours prior to closing to make sure no extra fees have been added.
- Mortgage interest rates are the lowest they have been in 60 years. Shop the market and make sure that you get the terms that are the best fit for your budget and future plans.
- Get a professional inspection and heed the report. Don’t be distracted by clever staging, which can camouflage housing flaws.
- Traditional wisdom was that you should buy a “starter home” and wait for the value to appreciate and then upgrade to a larger home. Current wisdom is that a qualified buyer can often afford a “move up” home on the first outing. Experts now recommend that you plan to stay at your new address for at least five years before selling. Be sure that your chosen city/region has good prospects for long-term career/business growth and stability.
- Do your due diligence if your dream home/condo has a Homeowner’s Association. Check the financial statements. If there are significant financial deficiencies, be prepared to ‘keep shopping.’
Homeownership is an exciting opportunity. With the right precautions, today’s market can provide extraordinary “dream home” opportunities for qualified homebuyers.