FIRST TIME HOME OWNERS

If you are interested in buying your first home, now is a great time!

Many potential first-time buyers believe they can't buy a house because they don't have perfect credit, or they haven't been at their job for many years, and so on.  This just isn't true. 

Where do you start? Speak with a lender and a real estate agent.  They can give you the facts about buying your first home.  The best advice, be selective and choose only reputable professionals to help you through the process.   

For your information, we have included some common home buying myths below.

The myths:

• In order to qualify for a house, you need 20% down
• Lenders are required by law to provide you with the best possible rate for your loan
• You can't qualify for a house if you've been with your current employer less than five years
• Your credit must be perfect
• Mortgage interest is not tax deductible

Now for the truth:

• Although it is true that lenders have gone away from allowing very low or no down payment loans, there are still many options available.  Some lenders allow down payment loans based on the Extended Tax Credits and so on.
• Every lender works with its own rates bases on their standards as well as the type of loan being considered. Rates change literally every day so once you've made the decision to buy a house, check rates with more than one lender and check on a daily basis.
• Job stability is important but the five-year rule is merely a myth. For example, if you have worked in public relations or some other industry for 10 years but have had three jobs in that time, because you've stayed within the same business, lenders will often consider this as continuous employment, especially if you've made advancements. In addition, solid credit and a larger down payment can compensate for work history in some instances.
• It's true that credit is very important when qualifying for any loan. However, credit score is not the only factor.  Your payment histories, amount of debt to credit and a number of other factors are all taken into consideration.
• As you make your comparisons of the financial benefits of renting versus owning, be sure to consider tax deductions. When you buy a home, the closing costs, mortgage interest, and points are all tax deductible.

The best things a first-time homebuyer can do is research and ASK QUESTIONS! It is ok to speak with different lenders and even real estate agents until you find the person and benefits that meet your needs. 

There is a lot to consider when buying your first home.  For example, it is important to go beyond just the size of the home or number of bedrooms:

• Public transportation - If you depend on public transportation then you need to check into what options are available in the area you are interested in looking.·
• Future Needs - Do you plan to live in this home and have children?  Or maybe you will be taking care of your aging parents in the next few years.  Will you have the space and amenities to accommodate the change in your family size?  
• Public safety - What is the crime rate in the preferred area? How close are public services such as police, fire, and hospital? 
• Utilities - This is an important expense to look at. Usually the seller can provide copies of the past few months for you to review, giving you an idea of what you would need to budget for.  Your real estate agent can also help you get average utility information.
• New communities - If the area you want is in an entire new community, what recreational amenities are offered? Is there a clubhouse? Pool? Playground? Exercise facilities? And, do you have HOA dues to pay to cover these amenities?
• Property taxes - Some tax rules provide special benefits for veterans, elderly citizens, and even long-time residents. You should inquire what these benefits are and whom they cover.

When you get to the point of being serious about buying a house, these are the steps to follow to make the qualifying and purchase as easy as possible:

• Establish good credit habits and cleanup any unfavorable reports.
• You should start saving for the down payment, closing costs, and extra for any hidden expenses. Don't forget about utilities, moving expenses, and items needed for the home.
• Start looking at various areas where you might be interested in living. Go to some open houses and do some comparison-shopping.
• Meet with a reputable lender and a real estate agent.  Real estate agents are generally paid only by the seller, which means as a buyer, you utilize their expertise at no cost!