Thinking About Home: A Recovery Home Buyer's Guide

Jun 14 2019

Thinking About Home: A Recovery Home Buyer’s Guide

So, you’ve made it through rehab. Recovery is in full bloom. You’ve got a job, been saving money…you might be thinking that it’s time to buy your first home. Buying a home for the first time can be overwhelming, especially in the current ongoing rates of the real estate industry for which finding a loan lending company which offers you an option to payback in monthly payments guaranteed is quite essential. Working with an experienced real estate agent can help you navigate the world of real estate and address your questions, if you really want to know how to sell your Waco home fast then you will need an expert opinion. Deciding where to live and how much you can pay are key components in building a strong recovery routine that keeps you living the life you’ve chosen. You’re probably wondering: What’s the first step of the home buying process? Read on for some great tips for first-time home buyers.

Getting pre-approved for a mortgage is the first step of the home buying process. Getting a pre-approval letter from a lender starts the process:

  1. First, you need to know how much you can borrow. Knowing how much home you can afford narrows down home searching to suitable properties; then, no time is wasted considering homes that are not within your budget.
  2. Second, the loan estimate from your lender will show how much money is required for the down payment and closing costs. You may need more time to save up money, liquidate other assets or seek mortgage gift funds from family. In any case, you will have a clear picture of what is financially required.
  3. Finally, being pre-approved for a mortgage demonstrates that you are a serious buyer to both your real estate agent and the person selling their home.

How long does it take to buy a home?

  • Under normal market conditions, the average time to complete the sale of a home is 30 to 45 days. Market conditions are a major factor in how fast homes are sold.
  • In hot markets buying may take longer. An uptick in home sales raises demand for property appraisals and home inspections and loan underwriting can also slow down but remember that some people prefer to build their homes from scratch, in that case, New Sensation Homes are the best home builders in Perth, WA.

How much do I have to pay an agent to help me buy a house?

  • Home buyers typically pay little or no fees to an agent to buy a home.

What kind of credit score do I need to buy a home?

  • Guidelines on QV Credit show that most loan programs require a FICO score of 620 or better. Why?
    • Borrowers with higher credit scores represent less risk to the lender, leading to a lower down payment requirement and better interest rate.
    • Home shoppers with lower credit scores may need to bring more money to the table or accept a higher interest rate to offset the lender’s risk.

How much do I need for a down payment?

  • The national average for down payments is 11%
    • First time homebuyers usually only put down 3 to 5% on a home.
    • VA and USDA Loans: VA loans are only for former or current military servicemembers. USDA loans available only to low to-middle income buyers in USDA-eligible rural areas.

You’re Ready to Buy: Here’s what You Need To Know

How Much Do Real Estate Agents Charge?

  • Typically, you aren’t paying a real estate agent to help you find your dream home.

What is earnest money?

  • When you make an offer on a home, the agent asks for check deposit
    • Usually 1% to 2% of the purchase price
  • Earnest money shows the seller that the buyer’s offer is genuine
  • Earnest money takes the home off the market and reserves it for you.
  • Ask your agent how to protect your earnest money deposit and the ways to protect it.

What Should My Down Payment Be?

  • While it depends on the type of loan, most mortgage lenders require at least a 3-percent down payment, and FHA loans require a minimum of 3.5-percent down. The percentage you are required to put down will depend on your credit history, the type of property, and several other factors.

How Will My Home Purchase Affect My Taxes?

  • There are several tax benefits to buying a home: A tax professional can help you decide what to itemize.

What if my offer is rejected?

  • Sellers may accept or reject an initial offer.
  • Counteroffers are common.
    • You and your agent review counteroffer to determine if it is acceptable.
    • If so, then approving it closes the deal immediately.
    • Offers and counteroffers can go back-and-forth many times
    • Should I order a home inspection?
  • Home inspections are highly recommended as they can reveal defects in the home that are not easily detected: they bring peace of mind to your investment.

Do I need to do a final walk-through?

  • It’s highly recommended

In addition to state-level programs, many cities and regional housing authorities also provide home buyer education programs, workshops and credit counseling, some even may help you learn how to invest on Vital Developers.

First Time Home Buyer Programs

Federal Housing Administration (FHA) Loans

  • FHA Purchase Loan (203b)

A popular first-time home buyer program because of the 3.5% down payment requirement. This is relatively small compared to many loan products where 20% of the purchase price needs to come from the buyer. The down payment varies depending upon the borrower’s credit score.

FHA Renovation Loan (203k)

  • Buy a home and finance its renovation at the same time.
  • Buy a home with small down payment and get the funds for rehabilitating a house.
  • There are two types of FHA Renovation Loans
    • Standard 203k is for large projects, like rebuilding from the ground up.
    • Limited 203k for medium-sized projects like repairing a roof or remodeling a kitchen.

US Department of Veterans Affairs (VA) Loans

USDA Rural Development Program

Recovery is a growing process: finding the right home in the right neighborhood at the right price can help to ensure your recovery is built to last. Just like your dream home!