Most renters yearn for the day when they can take the keys to their own home. Pride of ownership is one thing but when most renters consider that the cost to rent is often nearly or the same as a mortgage, they start to wonder exactly what it will take to become a homeowner. If this sounds like you, don’t worry, we’re here to help you take the steps to owning your very own home. Who knows it might be the first of many including investment property. But let’s start with these tips to stop renting and finally buy a house in Eugene.
Talk to a Mortgage Lender
When you are renting, it can seem like homeownership is years and years away. Many are pleasantly surprised when they sit down and speak with a mortgage lender. Getting the right information about first-time loan programs that have low down payments and flexible credit requirements. The lender will help you develop a plan to fix credit and reduce debt. He will let you know a ballpark based on your existing scenario what you can afford under certain circumstances.
Fix Your Credit
One of the biggest obstacles to home ownership is dealing with bad credit. Lenders don’t want to finance hundreds of thousands of dollars to someone who wasn’t responsible with a $2,000 credit card limit. Take an open and honest look at your credit report. Fix any outstanding issues. You may have items that are inaccurately still on the report. Take the time to remove these. Look at how much debt you have. Pay off or pay down credit cards to give yourself a better debt-to-income ratio, which is important in determining how much house you can afford.
Save for the Down Payment AND Closing Costs
Your mortgage lender should have reviewed new homeowner mortgage options with flexible credit and down payment structures. Even so, there are more than likely closing costs you will need to come up with. Some loans only require 3 to 3.5% in down payments while others require zero down if you were a veteran or buying a home in agriculture areas. Even so, inspections and closing costs are still your responsibility. Look for ways to come up with the required money. Consider tapping into a retirement plan for some of it. You can take some money out without early withdrawal penalties when you use it to buy a home.
Set a Timeline
Give yourself a deadline to get everything done and really start shopping. Determine how long it will take to fix the credit issues and pay down the debt. You might consider finding a cheaper place to rent while you save or just find other areas to save money for your new home. If you don’t have a deadline, you don’t have a goal. You just have a dream to own. Put things on a calendar and create that action plan.
Define Needs and Wants
Speak with a local realtor and find out what is really available to you in the price range you discussed with the mortgage lender. A big problem for new home shoppers is trying to get their dream home in their first home. Make a list of everything you want and need in the house. You will more than likely have to figure out what desires are eliminated from the list. For example, you might really want a pool but that might not be in the cards for your first home. You can always upgrade once you have equity in your home.