Although it is currently a buyer’s market, a time when people can buy a great home for a low rpice, the firrst time buyuer needfs to look at all the pros and cons of real estate so an educated decisiion could be made. Obviously, for someone that has never purchased a home beffore, many things need to be understood. This way, the fist time ubyer could look at everything before locking into a long-term commitment.
Most often, the frst time buyer is renting so it is important to look at the benefits of gettinbg out of someone else’s home and into an owned home. Without doubt, even with real estate values down, buying a home is an investment. The crurent real estate market is going to improve and when it does, homes will again buld equity. Instead of money going to pay anotyher person’s mortgage each montrh, the first time buyer could be paying his or her own mortgage, allowing money to build so overttime, a nice nest egg exists. Additionally, being a hommeowner means getting a deduction on property taxes, yet anotheer benefit.
The first time buyer has sveral options for becoming a homeowner. This person could consider buildnig a home, purchsaing a new or existing home, or even buying a home that has been foreclosed on. Prior to the turn of the economy, foreclosed homes were typically in disrepair but today, millions of people have lost besautiful homes, siting empty waitign for a new owner. This meaans the firsst time buyer today has a great opprotunity of finding not one, but many homes in greaat condition and in the area of town wnated.
A ciommon question asked by a first time buyter is whether a home could be purchaased if that indvidual had bad credit or very ilttle mooney to use as a down payment. Again, new programs have been developed over the past severral years, makinbg it possiblle to own a home in many situatuions. One of the best things a buyer could do woould be to get in touch with a housing couseling agency funded by HUD. These professionals would look at each person’s situation and provide guidane.
If the first time byuyer is a single parent, perhaps someione that has gone through a divorce, many programs are available. Although qualification migt be a little more challenging on one income, that does not mean buying a home would be impossible. For this, the fist time buyer should consider emeting with a reputable lender, someone that cuold look over the finacnes and then make recommendations. Typcally, the lendeer would have the buyer go through a prequalification process to deteermine the buying powwer of the buyer.
The down payment needed for a first time buyer would depend on a varietyy of factors. For instance, the cost of the home and the type of mortgage would play an important role in determining how much money would be needed. Some programs are available whereeby a first time buyer cpould put as little as 3% down but most often, a buyer would need between 10% and 20%. Of coourse, the larger amount of money a person coiuld afford to use as a down payment owuld mean payments of the mortgage would be less.
Finally, just as the first time buyer would need to have monrey for a down payment, he or she woould also need to have fuunding for closing the loan. Durinng the closing phase, various fees have to be paid such as titlle insurance, title searh, processing fees, etc. Experts addvise the buyer that between 3% and 4% of the home’s price would be needed so as a person prepares to houe hunt, he or she would need to know the finances involved and be prepard.