Interest rates are at all-time lows and home prices are starting to bottom out which means that a first time home buyer can purchase a great home at a rock bottom price with a super-low mortgage payment.
There will never be a better time to buy a home and you need to take the steps necessary to buy your first home.
Today, lenders are tightening their guidelines daily and you must get your ducks in a row if you want to get approved for a home loan.
There is still some zero down to low down payment loans which only require a 620 credit score but the minimum credit score for the first time home buyer programs may go up to 640-660 range in the near future.
Furthermore, current mortgage rates are in the low 3 percent range for a 30 year fixed which equates to a super low mortgage payment.
For example, if you purchase a home for $200,000 with a zero down payment and a 3.
25% interest rate (APR 3.
29%) then your payment would only be approximately $987 per month plus property taxes.
You can't rent a 2-bedroom place in many areas of the country for less than $1,000-$1,200 per month.
Also, you must consider the tax advantages of owning a home because the mortgage interest and property taxes are tax deductible.
In the above example, you would be able to deduct $541 per month in interest plus property taxes based on a 28% tax bracket.
Finally, if you purchase a home at discount today then it will eventually go up in value which builds up your net worth or wealth.
The first thing a first time home buyer must do is run their credit and 3 credit scores to determine if they have the minimum score to qualify for the firsthomebuyer program.
Next, you must get preapproved which means you will need to submit a loan application and provide a loan officer with pay stubs, tax returns, W2 forms, bank statements, etc.
Once you are preapproved then you will receive a preapproval letter which lets sellers know you are a serious buyer.
Now, you need to find a home and you should contact a local Realtor to provide you with some listings of homes on the market.
There is no charge in most states to use the services of a Realtor to assist you with the purchase of your first home.
You must compile a wish list and write down the things that your home must have like 2 bedrooms and things you would like the home to have like a fireplace but you must keep in mind that this is a starter home and you may not get everything you want.
After finding the home of your dreams, your Realtor will submit an offer to the seller and if your offer is accepted then it is time to secure the mortgage, close the deal, and get the keys to your new home.
Finally, Please Stop Paying Your Landlord! You are throwing your money away.
If you pay $1,000 per month in rent then you will pay $60,000 after 5 years of renting and nothing to show for it.
There is nothing like the pride of owning your own home and throwing a backyard barbecue for friends and family.
So what are you waiting for? Get off the fence and get a piece of the American Dream today!