First Time Home Buyer Tips and Advice

First Time Home Buyer Tips and Advice

Whether purchasing a home for the first time, or anything for that matter, it can come with much confusion and a lot of stress. The home buying process is often seen by many as a “daunting” process. This doesn’t have to be the case though, if the preparation and research is done. It can be even easier with rent to own as well.

Each and every person who purchases a home normally will have different experiences, hurdles to overcome, and ultimately have their own opinion on the home buying process. Even though the majority of home buyers are different, the home buying process is usually the same. There is a general outline that should be followed when buying a home for the first time.

Here are several first time home buyer tips and some advice to help make the process of purchasing a home for the first time much less stressful and effortless!

How Much Can You Afford?

When a consumer is purchasing a home for the first time, it’s important to know how much can be afforded! This is an extremely important part of the home buying process. Many first time buyers don’t realize or understand that it’s extremely important to know how much they can afford before looking at homes! It’s common to have first time home buyers contact real estate agents and get upset when they are educated on the importance of finding out how much home they can afford before getting out into the marketplace! It’s important that a first time home buyer understands what the costs of buying a home are but also why they are involved. Or you might wanna invest in learning about rent to own.

Not only is it important for a first time home buyer to know how much they can afford, but it’s also important to understand the difference between a pre-qualification and a pre-approval.

First and foremost, a pre-approval is more attractive to a seller than a pre-qualification. A pre-qualification is a quick and very general overview of a first time buyers financial situation. The information used for a pre-qualification is usually given to the lender by the potential mortgagee, which can often be inaccurate. In addition to the general overview of the first time buyers financials, the lender usually will pull a credit report to make sure the credit scores are within the required guidelines of the different loan programs. Click Here To Get Your Credit Report

A pre-approval is a detailed look into a first time buyers financials. It includes a lender pulling a fact data (Tri-merge) credit report, collecting the first time buyers pay stubs, W-2’s, verifying their employment, and any other information needed to approve the buyer. This process may sound much more difficult, but depending on the lender that a first time buyer chooses, it doesn’t have to be! Having a pre-approval instead of a pre-qualfication is not only attractive to a seller, but also can be the difference in a first time buyer winning in a multiple offer situation! Click Here To Get Your Free Credit Report

Set Realistic Expectations when purchasing your first home!Set Your Expectations when buying a home for the first time, an extremely important tip is to make sure expectations are set. By setting realistic expectations, the chance to be disappointed or let down is minimized. So, what type of expectations should be set before purchasing a home for the first time?

Once a buyer knows how much they can afford, it’s important to figure out what will their money get them. When buying a home for the first time, it’s important to do it with a purpose and a realistic goal in mind. How big of a home can be afforded? What style of home is desired? What are acceptable locations of the home? It’s important that first time buyers have a strong feeling on items like these but also a good idea on which items they are willing to be flexible with. It is a great idea to prioritize these items in order of importance.

Learn About the Home Buying ProcessThe home buying process is exactly that, a process. There are certain steps that need to be taken to ensure the process of buying a home for the first time, goes smooth. By understanding the process, it greatly reduces the chance that a buyer is disappointed, let down, heartbroken, or frustrated. There are many things that a first time buyer should be doing before looking for homes, such as getting a pre-approval, but also many things that a buyer should be doing once they are under contract on their future home. Many first time home buyers don’t understand why it generally takes 60 days from contract to closing.

Are There Any Incentives or Grants Available?
First time home buyers are often able to take advantage of first time home buyer grants or incentives. It’s important that a first time buyer understands that every lender is different. From the interest rate they are able to offer, the type of loan products they offer, to the incentives or grants they are able to offer.

Consider all the expenses involved in owning a home
Many first time home buyers make the mistake of not considering the costs of owning a home. It’s common that a first time buyer purchases a home that is the absolute maximum they can afford according to a lender. This can lead to problems once the buyer realizes the other expenses involved in owning a home. First time home buyers often forget about additional expenses of utilities, furniture, appliances, insurance, and groceries, to mention only a few. That is why rent to own is such a unique and viabl eoption for those who have subprime credit. Click Here To Learn More About Rent to Own

Home Buyers May Get Help From A Stock Downfall

Home Buyers May Get Help From A Stock Downfall

The Federal Reserve recently raised interest rates, U.S. stocks are tumbling and new worries about the Chinese economy seem to emerge daily. So now is a great time to buy that house you’ve been looking at or rent to own.

Well, not necessarily. But consider: all the worries about China that have battered the U.S. stock market in early 2016 have done the opposite for bonds. More money pouring into Treasury's has driven mortgage rates to a two-month low. A 30-year mortgage slipped to 3.92% in mid-January.

The housing market had already been gaining ground even before the latest drop in rates. Housing, has been one of the strongest parts of the economy over the past year. Sales of new and previously owned homes are likely to finish 2015 at the highest level since before the Great Recession.

What’s more, the number of permits to build additional homes is on track to reach an eight-year high.

Six years ago, builders were producing fewer than 600,000 new homes a year.

Sales of existing homes, are about 25% higher compared to the post-recession low.

Most economists predict new construction and sales will increase again in 2016, aided by a much improved labor market. In the past three years, the U.S. has produced 8.2 million new jobs to give more people entering their prime earning years the ability to buy a home.

The big wild cards are mortgage rates and home prices, both of which could deter buyers. Which is why rent to own is such a viable opportunity for someone or a family to own a home! Click Here to Find Out

How Rent-to-Own Works

Buying a home through a rent-to-own or lease-option agreement has become more popular in the aftermath of the 2008 financial meltdown. More people have been looking at creative solutions to buying a home, but it’s important to differentiate between creative and smart. Renting to own might be worth considering depending on your situation.

How Rent-to-Own Works

These deals become more common when the market is slow for two reasons. First, a slow market makes it difficult for homeowners to sell their homes. Second, when the market is slow, more people struggle with low credit and saving up for a down payment.

Rent-to-own, sometimes called a lease option or lease purchase, is a self-imposed savings plan for the renter/buyer. The renter pays an upfront fee, called an option fee, which guarantees the renter the option to purchase the home after a specified amount of time, usually one to three years. The renter agrees to pay the fair market value monthly rent on the home plus a monthly rent credit. During this time, the homeowner can’t sell the home to someone else. The price of the home is fixed at the beginning of the period, and the renter gets it at the preset price – whether the value goes up or down. After the time period is up, the renter can put their upfront option fee and accumulated rent credit toward the purchase of the home.

Read more at Freedom-Rent-to-Own.com

Who Benefits From A Rent-to-Own Property?

In the right circumstances, both parties can benefit greatly from a rent-to-own agreement. Tenants who take on rent-to-own contracts tend to take better care of the home since it will be theirs in the near future.

•Tenants that benefit from these arrangements include individuals who:
•Have mediocre credit and cannot qualify for a mortgage
•Don’t have enough employment history
•Cannot save up a down payment large enough for a mortgage
•The tenant has the opportunity to improve their credit or to gain further employment history. By the time the lease is up, the tenant should be in a good position to buy the home.

Not only will they have the necessary deposit covered (at the very least in part), but they will have already built equity in the home that they wish to buy without being penalized for poor credit history or lack of a down payment. Find out more here.

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For some potential homeowners, renting a home for a time before buying is an attractive option. It allows time to save money or otherwise get financially prepared before buying a home, and it also offers a way to get to know the property before committing to it. Regardless of your situation, a rent-to-own model could put you on the path to homeownership.

For credit-challenged former homeowners, a rent-to-own agreement (also known as a lease-purchase) allows them time to save up the required down payment, establish a longer job history, and deal with whatever is making it difficult to obtain a mortgage. For first-time buyers, the model gives them a taste of what it’s like to own a home without having to come up with a down payment or commit to a mortgage.

So is a rent-to-own agreement a good idea for you?

A lease-purchase may be right for you if:
•you have difficulty qualifying for a mortgage now but won’t in a year or two;
•you are having difficulty saving for a down payment;
•you believe interest rates will fall or home prices will rise over the next year or two and •you would like to lock in a price now;
•the owner will agree to refund all or part of your option payment; or
•you like the home and would like to live in it for years.

Do your research before you commit to a rent-to-own deal, and be sure it’s what you want.

Owning a home – it’s one of those things that we’re told we should do from early on in life.