In many housing markets, it can be less expensive to own a home than to rent an existing home or apartment. This is true in the Chicagoland new home market where new home prices are as low as they have been in a decade and mortgage rates continue to hover at historic lows.
Here are our tips for First-Time Home Buyers:
Do a credit check. Cash and good credit are critical to snagging a bargain home and keeping it. Before you go shopping make sure you have the cash on hand for a down payment and a mortgage lender who is willing to provide you with a home loan at an affordable rate.
Get pre-approved by a lender. At Campbell Homes in Colorado Springs, we are happy to recommend reliable local mortgage lenders for you to work with. Shoot us an email and we can provide you with a few options! Pre-approval can help expedite the closing of your purchase, a process that given the current economic climate can take months.
Consider a down payment and the alternatives. Another key financial factor is a down payment. A common myth in today’s housing market is that a 20% down payment is required in order to purchase a new home. However, there are many government-backed options available for first time homebuyers with down payments as low as 3%. Your mortgage lender should be able to find alternatives that work for you.
Do your homework. Check the selling prices of comparable homes in your area to give you a general idea of what you can expect to pay. You can also do a quick search of home listings within your area.
Determine what you can afford. Use a mortgage calculator to see what your monthly payment will be. Don’t forget that you will need to add the cost taxes and homeowners insurance to your monthly mortgage.
Find out how much you’ll likely pay in closing costs. The upfront cost of settling on your home shouldn’t be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items such as homeowner’s insurance or association fees. Remember that working with a new homebuilder, they will typically assist in covering or reducing out of pocket closing costs. These closing cost credits which can be worked into the purchase of your new home is just one of the advantages of buying a new construction home.
Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28% of their income on housing costs. Go much past 30% and you risk becoming house poor.
Remember to look at the big picture. Buying a home is a great way to build wealth, maintaining your investment can be labor-intensive and expensive. Unexpected costs associated with purchasing a resale home can drain your bank account. While new homes come with a new home warranty, which will eliminate the costly expense of out of pocket repairs, you will have the cost of landscaping, fencing, furnishing, etc.
Work with a professional. Purchasing a home isn’t for the faint of heart! A Realtor, Lender or Builder who specializes in working with first time home buyers, new homes, etc. will be able to guide you down the path to home ownership by looking out for your best interests and saving you time in your search for a new home.
Look at New Homes. Purchasing a brand new home has never been easier. Today’s incredibly low interest rates, affordable prices, incentives, and builder assistance in closing costs, make a new home a very affordable option for your venture into home ownership.
With home prices starting under $1000 a month, there’s never been a better time for first time homebuyers to purchase a new Silverthorne Home than right now! Silverthorne Homes has energy efficient, stylish and comfortable new homes in Sycamore, Dekalb, Lily Lake, Aurora and St. Charles available now.