Are you looking to buy a home and don’t know where to start? Maybe you are a first time homebuyer and are not sure whether it’s better to rent or buy. Or maybe it has been a while since you’ve bought a home and are not quite sure what the first steps should be! We get asked questions like these all the time so we decided to put together a blog post with some tips and answers that may help you.
Should I buy or rent?
This is a question we get most often with first time homebuyers and especially millennials. There is no specific answer, as it always depends on a person’s specific situation. Typically, if you can buy then it is better to buy because when you rent you are putting money in someone else’s pocket. That person is building their personal equity. When you buy, your money is going towards building YOUR equity! A good lender can help you get monthly mortgage payments that are similar to the rent payments you are used to paying. If you are not planning on staying in the city for at least 2 years, at that point we would say that maybe renting is a better option for you. Also if your credit score needs a little help it would be better to rent until the score was at a satisfactory level. A lender will be able to advise you on the specifics of that.
How much money do I need to put down?
Now you may say “well I cannot afford to pay the down payment so there is no way I can buy”. There are programs out there that do not require any money down! The THDA First Time Homebuyer program is a 0% downpayment program that most lenders are qualified to give you. Another option is to have all or part of your down payment gifted to you by someone else. This must be a gift, and not another loan, otherwise the lender will not accept it. If you can afford to put 20% down on a Conventional loan this is a great option because you are not required to pay Mortgage Insurance which saves you money each month! Again, a lender would be able to advise you more on the specifics of these programs and options.
What are the first steps I need to take?
First, if you are going to finance this purchase with a loan you need to speak to a lender. You will want to go over specifics with them and find out what amount you are pre-qualified for. This will give you the best indicator of what you can afford. You also will want to go over estimated closing costs and other expenses throughout the process and make sure your financials are ready to go. Once you have received your pre-qualification we can start talking about what you want in a house. From there the fun begins! If you are interested in starting this process and need a lender or have more questions reach out to us!
