Yesterday I was talking to a young couple about purchasing a home in the next couple years. We discussed a few things like if they knew what their credit ways like. He said that he thinks it is 580 or so. I told them that as a first time home buyer, there are many tools to get you into a new home. However; they need to bring that credit score up. First, you need to get your credit report so you know the good, the bad, and the ugly. From there you will be able to evaluate and bring that score to the required minimum of 640.
The Federal Housing Administration offers first time home buyers loans with very little down payment. Your down payment can be as low as 3.5% down. There are even home loans from the USDA in the outlying areas. USDA loans have to meet income restrictions and also property location restrictions. USDA loans offer no payment to help get the new buyer into the home, just a service fee which is currently about 1%.
Be sure to ask me for recommendations on lenders. Not all lenders are the same. I can recommend ones that I have worked with in the past that are honest, professional and in compliance with required laws. Unfortunately there are lenders out there that prey on unexerienced buyers. We don't want you to encounter those.
Please call me if you have any questions, even if you have already purchased. I am here to help!
Is your home worth the asking price?
When purchasing your home with a mortgage, you lender will order an appraisal on the home or property. This appraisal will determine how much the lender is willing to give you to buy that particular piece of property. This is a vital step and one that often confuses both the buyer and the seller. The appraiser is a state licensed professional that will come to your property and will determine any upgrades or deficiencies that a home may have and how it could impact the value. They also will compare the home to others that are currently on the market in your area. They will also analyze data from recently sold homes to compare features, land size, home size, age of structure, any upgrades and so much more. This appraisal typically costs a buyer $300-700, which is part of the closing costs.
There may be times when a home is listed or under contract for an amount much higher than what the home appraises. This happens and should not be reason to panic. As your agent, I would look to determine why this occurred. Were there deficiencies which impacted the value? Are these items that the seller can correct? Was the information correct? I have seen once that the appraiser had incorrect square footage which could greatly impact value.
If the appraisal is low and correct, the buyer has a few options. The buyers can try to renegotiate the sales price. This requires they buyer and the seller to agree and sign new documentation. The buyers can terminate the contract and look for a new property. This too will require signed documentation. Or the buyers can choose to pay the difference at closing; this will required lender approval and documentation as well.
I hope that this helps explain the appraisal process. And I am always here to answer any questions and of course help you buy and sell!