Homebuying Tip: Know Your Money Options –
When you’re ready to buy a home, knowing your money options will put you in a great place to make it happen. Depending on where you live, there are many possibilities when it comes to financing a home. Taking the time to learn about those possibilities can save you both time and money in the long run.
For our final installment on our homebuying tips series, learn about some tips and get to know your options for dealing with your money as your purchase your first home.
Look at what you can afford
Before you approach a lender or start shopping for your home, it will be important to figure out how much you can actually afford to pay. Be realistic with yourself as you look at your budget. Decide not only the most you would be willing to pay but also the amount you would feel most comfortable paying. It is helpful to do this so that you are prepared for any amount the bank and lender approve you for. You don’t want to stretch your budget too thin when you purchase a home because there may be unexpected costs.
Talk to more than one lender
It is easy to just go with the first lender you talk to when becoming a homeowner for the first time. Only talking to one lender may limit your possibilities. The more you shop around, you can ensure that the loan (conventional or not) and rates you are being offered are the best options out there for you.
Consider Government-Insured Loan Programs
If you feel like you have no options financially, you may want to explore government loan programs. These programs may make it possible for you to finance a home whether you are doing great financially or if you are struggling. There are three different government-based loan programs that may be able to help you depending on your circumstances.
- FHA: Federal Housing Administration Loans are helpful for those who don’t have great credit or savings. They are loans that require 3.5% down and a 580 credit score.
- VA Loans: The U.S Department of Veteran Affairs offer loans for eligible active-duty and veteran military service members and their spouses. They do not require a down payment.
- USDA: The U.S. Department of Agriculture offers loans to help moderate to low-income borrowers buy homes in rural areas. There are certain requirements to the loans and some versions do not require a down payment.
When you are trying to make the right financial choice as you buy your first home, it can be overwhelming. Luckily, there are resources available to you that can help make those decisions easier. Mary Rigg has Financial Coaches can help you look at your budget, credit, and loan offers to help you make a smart homebuying decision.