Home-ownership In 2019: Debunking the Myths
With the age of social media and internet based resources it has been increasingly easy for buyers in today’s market to find answers to questions and research their home purchase directly online. Millennials are a large driving force in the current market and this population is buyer conscious, educated, and ready to hit the ground running when it comes to purchasing their homes. No more are we seeing the same reliance on Real Estate Agents to guide and provide the resources to begin home searches. The Mortgage Loan Officers in some cases are even chosen simply for the convenience of having the ability to complete the transaction completely online.
2019 is shaping up to be another year or technological advances in the Real Estat space, but one thing remains unchanged – the need for buyers to have accurate knowledge of their upcoming home purchase.
As a Mortgage Loan Originator here are a few questions I receive frequently:
Can I purchase a home with no money out of pocket? Possibly, but typically there is some out of pocket cost incurred. In most states there are programs that are offered to provide down payment and/or closing cost assistance for home buyers. These typically come with their own guidelines and that is why I strongly encourage working with a reputable Loan Officer that is familiar with the different options. In addition there are grants and low down payment mortgage programs that allow the flexibility to have less money required for down payment, and negotiating closing cost assistance when submitting an offer can also lessen the out of pocket expense.
Do I need a Real Estate Agent? I highly recommend working with a local Agent in the market you are looking to purchase in for several reasons:
They understand the housing landscape
Relationships are the cornerstone in Real Estate
A Realtor essentially represents you and your best interest in the transaction, and for buyers these services are free of charge
How much money do I need to have saved? Ideally, you will want to have enough savings to cover the down payment, closing cost, the out of pocket expenses associated with home inspections, appraisals etc., a cushion of reserves that are equal to a few months of the new mortgage payment, and moving expenses if necessary. This may not be an exhaustive list so it is important to speak with your lender to get a better idea of how this may look for each individual circumstance.
Do I need a 700 credit score to buy a home? Credit scores are a big driving factor in a lending institutions decision to approve a mortgage, however they are not the only factor. Credit score requirements can vary from lender to lender and from product to product, with some offering financing options as low as a 585 credit score. Does this mean that you can or should just stop focusing on your credit and jump into purchasing a home, absolutely not! It is always important to strive toward financial freedom by handling credit responsibly and with a goal to pay any monthly payments on time, keep balances lower than 30% of your available limit, and never over stretch yourself beyond your financial means.
While taking the journey into home-ownership is certainly a rewarding one, it is important to have the right tools and resources to make it as smooth as possible. The RIGHT mindset, the RIGHT Realtor, and the RIGHT Lender make finding the RIGHT house that much more rewarding. Happy house hunting!