As a realtor I hear so often from people that are fed up with renting and want to own, “I’m not ready now.” “I need to work on a few things.” “I’ll be ready in a couple years.” ”I need to get my credit up.” “As soon as I pay off some bills.” “I have to save more.”
All of these things can and often are true. However, without a plan and a specific goal, a couple of years turns into 5-10. In five years the average renter would have given away $60,000 in rent. With nothing to show for it. Now don’t get me wrong there are people and instances where it might make more sense to rent but 95% of the time a person is better off owning or at least sitting with a professional to weigh the pros and cons of owning.
Myth #1) I Need to Have 20% Down
No. Just no. There are programs with as little as $1,000 down. A down payment of 3.5% is a good frame of reference but again may not be necessary. The main reason for wanting to have money saved is because it’s good to have savings. We never want to be in a position where we do not have any savings. With a solid plan of action within a matter of months you could have enough for a downpayment for a home as well as having a solid savings.
Myth #2) My Credit Isn’t Good Enough
Maybe. Maybe not. The best way to find out if your credit is good enough is to talk with a loan officer. A loan officer will pull your credit (Having your credit pulled for a purpose is fine and necessary) and see if you can qualify now or if there are things that need to be done. If you do have things that need to be taken care of on your credit the loan officer will be able to tell you exactly what those items are. As well as how to go about the repair. Often times the loan officer will assist you in handling small repairs. Most importantly you want to choose a loan officer you know and trust. If you don’t know any, ask your colleagues and friends who they used and what their experience was. Or call me, I worked in the mortgage industry for over 10 years and know several loan officers I’d be happy to refer you to.
Myth #3) Home Repairs/Financial Burden
Often the fear is that you’ll buy a beautiful house then as soon as you move in you’ll need a new roof or the furnace will break or something else will happen. The reality is before you buy a home you should have a home inspection done. The home inspection is a lengthy report that goes over every detail of the home’s condition. In this way there should not be any surprises after closing. In addition if you don’t desire to mow a sprawling lawn you might look at buying a townhouse or condo. In this way you do not have lawn care or snow removal and you are most often not responsible for the exterior of the home but you still have the benefit of equity and ownership.
Having a solid plan is critical. Call me for more information on making a plan that works for you. If you want to be on the path to financial stability and wealth building the first step is homeownership.
Richelle Taylor – Keller Williams Classic Realty
612-964-0143 – firstname.lastname@example.org