Wondering how you can afford your first home?
There are a couple of options, even if you think home ownership is way out of reach.
If you believe that you don’t have enough savings, and that you should put 20% down on a mortgage, do a little research first. You may qualify for a Federal Housing Administration Loan, which requires as little as a 3.5% down payment. A REALTOR® can help you navigate the details of an FHA loan and find the right place for your budget. Remember, though, that you’ll need more money for the closing costs as well, so budget that in on top of the 3.5%.
If you’re concerned that your credit is bad, you may want to talk to a lender, as your credit may not be as bad as you think. And if it really is that bad, then you should take steps improve your score right away. Order a copy of your credit report and make sure it’s accurate, then be diligent about paying down your bills. If you are proactive about repairing your credit, you can qualify for a loan sooner than you might think.
If you are worried about depleting your savings for a down payment, don’t forget about the $8,000 first-time homebuyers’ tax credit. Because it’s a credit, you can’t use it for your down payment as you won’t receive the money until after you’ve closed — but you’ll get some of your down payment back on tax day!
None of these may not be right for you. And of course, you should not go out and buy a house just because it’s a buyer’s market. But, if you’re hesitating, it’s worth a little research. The days of the zero-down mortgage are gone (and good riddance!) but you do have options!
Are you a first-time homebuyer? Do you have other questions about home affordability? Drop me a comment!
