Buying a property is always an important investment and more so when it is intended for our family. The process can be annoying, lengthy, and worrying, but this can be alleviated if you know what you need to improve before you begin.
If you're ready, join us in discovering the first steps to buying your home.
1-START SAVING! ASAP AND MORE, THE BETTER
There are several expenses involved in buying a property, but you can reduce them to two main ones:
Down payment: The first payment for the purchase of your house is usually the most difficult to make. People generally save an average of 4 years to get the down payment, however, is it worth the hassle? The answer is yes and no at the same time. It all depends on the type of loan that suits you best. This is how saving 20% to not pay the insurance would cost you thousands of dollars a year, which is convenient if you have a good score, in addition to giving only 3.5% and resigning yourself to paying the insurance for the possible next 360 months or refinance it when you have everything in order.
Closing Expenses: This is one of the least known, highest, and most important expenses if you plan to live in the property for many years. These expenses include processing fees with the lender, points, title insurance, and more. The positive of all this is that by investing a greater amount of money in the reduction of points you can get a better interest and therefore, a lot of money saved.
2-CHECK YOUR CREDIT AND DON'T BE SURPRISED
The first thing lenders check to see if your home qualifies is your credit. The result affects the documentation. Now, there are two important things in your credit, the first and most notable is the score; the second, the credit history; If you had a good score and an excellent credit history, you could qualify for a house with competitive interest, but with collections, replacements, among others; it will limit your options and make the process take longer.
3-DON'T HAVE PERFECT CREDIT? EASY! IT'S TIME TO FIND YOUR IDEAL TYPE OF MORTGAGE
As we mentioned earlier, good credit opens many doors for you. Below you can see the 4 most common types of cases:
- DO YOU HAVE A GOOD SCORE BUT NOT A GOOD STARTING DEPOSIT?
If you are the first buyer and you have at least 3% of the value of the property, it is very likely that you can apply for a conventional loan. If you don't have anything upfront, you still have the option to apply for a loan with the NACA program.
- DO YOU HAVE A GOOD SCORE AND STARTING DEPOSIT?
Let's define a good score. At least 680 points are recommended to buy a home. However, if not, you can get it with the FHA, and even if you have 500 points if you have at least 10% of your home's value as a down payment.
- HAVE A POOR SCORE AND A LOW INITIAL DEPOSIT? WILL YOU ALWAYS HAVE TO RENT?
Not necessarily. The answer will depend on why you have a bad score. If it is due to the late payment, bad use of cards, etc., your best friend will be the NACA program, to which we will soon dedicate a special article. If this is not the case and it is because you have canceled accounts, collections, replacements, among others; you have two options:
- First, repair your credit and apply for the NACA program.
- The second is to charge more for your down payment and apply for the FHA.
In any situation, AMG has an answer and can guide you on the path that suits you best. Leave us your contact information or call us indicating that you saw our blog to give you a 25% discount.