Three Steps to Success for Buying a Home this Spring

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Low mortgage rates are attracting homebuyers in large numbers. According to the Mortgage Bankers Association, applications in the first week of March for loans from families buying a home this spring were up 30 percent from the year before. Meanwhile, according to the National Association of Realtors, the number of homes for sale is lower than last year. In short, the competition is going to be intense, especially for homes within reach of first-time buyers.

The HomeOwnership Center has a few tips for homebuyers this season, that if followed will help smooth what is a complicated, and often frustrating process.

Step 1: Consult a Homeownership Advisor for Guidance and Advice.

You don’t want to search for a home unprepared. Knowing the numbers that matter when buying a home is extremely important to save time, frustration and lead to the best choice. More than two-thirds of consumers in a NeighborWorks America survey said that the home buying process is complicated. Demystify the process by consulting with one of the HomeOwnership Center’s housing advisors.

Our staff are certified professionals who can walk you through the different types of mortgages and interest rates; the effect credit scores have on being approved for a loan, how much down payment is needed for purchase, and how much home is really affordable to you.

Step 2: Build a Budget

Knowing your numbers is one thing, having the road-map to get you there is another. There’s no better tool to chart your course than with a budget. National surveys have shown that less than one-third of consumers have a budget. Going into this home buying season with a budget that includes potential changes in commuting costs after purchase, home maintenance expenses, and even estimates for changes in life circumstances such as becoming a parent or paying for college, will give you a leg-up on the competition and provide peace of mind.
Once all the numbers are on the table, it’s easier to see what type of home suits a family’s budget and needs, what might be necessary financial trade-offs, and what could be a direct line to trouble.

Step 3: Be Determined and Informed

Finding the right mortgage and the right home takes time, and it’s natural to want to shorten the process. However, making a winning bid on a home that isn’t right, and cutting corners to do so, could lead to trouble. For example, forgoing a home inspection to speed things up, or not fully understanding the terms of the mortgage are ingredients for problems down the road.

Following these three steps will help ensure homeownership success this season and for the long run.

Know Your Numbers

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Know Your Numbers

What are the 4 most important numbers that homebuyers need to understand? Watch the video and get to know the numbers that control your ability to buy and afford a home. If you would like to learn more about your credit score and the way in which it affects your mortgage payment, check out our article on Credit Scores and Interest Rates.

Still have questions? The HomeOwnership Center of Greater Dayton can help you understand your numbers and set you on the smart path to homeownership.

Call us at:

937.853.1600

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Do You Know Enough about the Homebuying Process?

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When you buy your first home, you have a lot to learn about the homebuying process and the decisions that need to be made along the way. You need to understand many new terms and make confusing decisions about mortgages, homebuyer programs, and more. What is PMI and will you have to pay for it? What is better for you, a conventional loan or an FHA loan? What homebuyer programs are available to first-time homebuyers in your area? Are you better off using extra cash to increase your down payment or using the money to buy points and reduce your interest rate?
You need to learn how to work with real estate agents and loan officers. You need to be able to negotiate on price, repairs, and seller incentives.

Bottom line, you have a lot of information to pick up in a short period of time.

Do you think you can learn everything you need to buy a home from your parents? Think again. When was the last time your parents bought a home? The process of buying a new home, mortgages, and qualification requirements all frequently change. Consumer protection laws have changed and you will be facing new forms and disclosures that your parents have probably never seen.

To add even more pressure, buying a home is probably the largest purchase you will ever make. Making a wrong decision can cost you many thousands of dollars over the life of your mortgage.

How can you learn more about buying a home?

If you don’t have the knowledge or skills you need to buy your first home with confidence, engage a non-profit organization like the HomeOwnership Center of Greater Dayton. Classes and interaction with experienced coaches will help you prepare your finances, understand the homebuying process, and ensure you make good homebuying decisions.

Call us at 937.853.1600 or visit our Homebuyer page to learn how we can help you buy your first home.

This is the sixth post in the series, Are You Ready to Buy Your Own Home? You can read the other installments in the series by following these links:

Part One: Is Your Credit History Good Enough to Buy a Home?
Part Two: Have You Saved Enough Money to Buy a Home?
Part Three: Are You Mortgage Ready?
Part Four: Are You Planning to Stay in the Home for the Next 5 to 7 Years?
Part Five: Are You a Realistic Homebuyer?
Part Six: Do You Know Enough About the Homebuying Process?

Are You a Realistic Homebuyer?

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You have been dreaming of buying your own home. You have your finances in perfect order. You have a good steady job and you are planning on living in the home long term. According to television, all you have to do is visit three homes, decide which big expensive house you want and somehow, all of the details will magically work themselves out between commercials. Right? Wrong!

Buying your first home is hard work and requires patience and determination. When buying a home, nothing ever goes smoothly. There are always road bumps along the way and you need to be prepared to deal with them. You need to be a realistic homebuyer.

Being realistic means knowing that the home inspection could show that the roof will need replacement or that your lender needs more documents or clarification on the information that you did submit. Be prepared to have your personal finances picked apart under a magnifying glass. You will need to explain anything that your lender doesn’t like on your credit report. Do you remember being late on your rent two years ago because you needed to take your son to the emergency room? Your credit report hasn’t forgotten.

Being realistic also means buying a home that you can afford. Just because a bank is willing to lend you $180,000 to buy a house does not mean that you can really only afford to live in a $125,000 home.

When lenders look at your finances, they are considering your current income, credit history, and debt balances and payments. Remember those DTI ratios that we discussed in Part Three of this series? They are not looking at other expenses that might be very important to you. For example, the lender does not weigh the fact you are planning to go back to college to earn your masters degree. With more college debt in your future, buying the less expensive home might be a better choice for you.

How can you get real about buying a home?

If you are not ready to handle the problems that will arise in the homebuying process, you are not prepared to handle the real world issues that come with owning a house. The HomeOwnership Center’s First-Time Homebuyers Class can make you better prepared to have realistic expectations when buying your first home.

Call us at 937.853.1600 or visit our Homebuyer page to learn how we can help you buy your first home.

This is the fifth post in the series, Are You Ready to Buy Your Own Home? You can read the other installments in the series by following these links:

Part One: Is Your Credit History Good Enough to Buy a Home?
Part Two: Have You Saved Enough Money to Buy a Home?
Part Three: Are You Mortgage Ready?
Part Four: Are You Planning to Stay in the Home for the Next 5 to 7 Years?
Part Five: Are You a Realistic Homebuyer?
Part Six: Do You Know Enough About the Homebuying Process?