FIRST-TIME
HOME
BUYER
Purchasing Your First Home. Your complete guide to navigating the mortgage process and achieving homeownership.
SIX REASONS TO
BUY A HOME!
Prices Will Continue to Rise!
The real estate market continues to show growth, and waiting could cost you more.
Mortgage Rates are Always Changing!
Interest rates fluctuate daily. Locking in a rate now may save you thousands over the life of your loan.
Whether Renting or Purchasing, Someone is Paying the Mortgage!
While renting, you're paying someone else's mortgage. Why not build equity in your own home?
Owning is a Form of Forced Savings!
Every mortgage payment builds your equity and contributes to your long-term wealth.
There are Substantial Tax Benefits to Owning a Home!
Homeowners can deduct mortgage interest and property taxes, potentially saving thousands annually.
It's Time to Have a Place to Call Home!
Create lasting memories in a space that's truly yours, with the freedom to customize and make it your own.
AMERICA'S #1 LONG TERM INVESTMENT!
REAL ESTATE continues to be seen as the best long-term investment in America today.
SOURCE: The Gallup Organization
The Gallup Organization recently released a survey in which Americans were asked to rank what they considered to be the "best long-term investment." Real Estate ranked number one, with 35% of those surveyed saying it was a better long-term investment than stocks & mutual funds, gold, savings accounts or bonds.
Even stock investors ranked real estate number one. According to the report: With housing prices showing a steadier path upward in recent months, even stock investors are about as likely... to choose real estate (37%) as stocks (32%) as the best long-term investment.
THE COST OF WAITING
We know that big life decisions can be kind of scary and even unsettling. But even though there are several emotional factors included when purchasing a home, you have to remember the end result.
Waiting to purchase a home until you are emotionally ready, may not make the most financial sense in the long run.
Below you will see the impact an interest rate increase would have on the mortgage payment of a home selling approximately for $250,000 today if homes appreciate at a rate of 5.3% over the next 12 months.
| Period | MORTGAGE | INTEREST RATE | PAYMENT & INTEREST |
|---|---|---|---|
| TODAY | $250,000 | 3.64% | $1,142 |
| Q2 2021 | $263,250 | 4.7% | $1,365 |
HOME PRICES ARE EXPECTED TO RISE!
Whether you are planning on relocating to a different area of the country or are planning to stay in your current city or state, waiting to move may end up costing you more than you think!
Keep in mind that the industry changes day to day.
CoreLogic's Housing Price Index predicts growth on a year-over-year basis of 2.5% from November 2020 to November 2021.*
SOURCE: CoreLogic U.S. Home Price Insights Report
AVOID THE RISING RENT TRAP!
Homeownership is a great investment and the fixed interest rate on your mortgage provides stability that renting cannot offer.
When you rent, your landlord can raise your rent each year, and you may be forced to move when your lease expires. Additionally, landlords often factor in maintenance costs and other expenses into the rent you pay each month.
THE POWER OF EQUITY!
As the economy continues to improve, more and more Americans are seeing their personal financial situations also improving. Instead of just getting by, many are now beginning to save and find other ways to build their net worth. One way to dramatically increase their family wealth is through the acquisition of real estate.
For example, let's assume a young couple purchased and closed on a $250,000 home in January. What will that home be worth five years down the road?
Over a five-year period, that homeowner can build their home equity to over $40,000. And, in many cases, home equity is a large portion of a family's overall net worth.
SOURCE: Home Price Expectation Survey
SAVING FOR A DOWN PAYMENT
Saving for a down payment doesn't have to be overwhelming. Small sacrifices can add up to significant savings over time.
For example, saving $150 per month for 36 months totals $5,400, which is close to a 3.5% FHA down payment on a $150,000 home ($5,250). It adds up fast!
The road to homeownership begins with the first step. Another example: saving $250 per month for four years at zero interest equals $12,000, which exceeds the $10,500 required for a 3.5% FHA down payment on a $300,000 home. See, you can do this!
The simple and timely message of daily saving disciplines and delayed gratification may not be exciting or today's norm, but mastering it will set you apart for a brighter tomorrow like nothing else can.
WHAT YOU NEED TO DO
Find Out Your Current Credit History and Score
You don't want to start out with any surprises.
Start Gathering All of Your Documentation
Including Income Verification (W-2 Forms, Tax Returns, Employment), Credit History & Bank Statements.
Contact a Professional
To help you develop a spending plan and determine how much you can afford.
Consult with a Loan Officer to Review Your Income, Expenses and Financial Goals
To determine the type and amount of mortgage you qualify for.
Talk to Me About Applying for a Mortgage and Getting a Pre-Approval Letter
This letter provides an estimate of what you might be able to borrow (provided your financial status does not change) and demonstrates to home sellers that you are a serious buyer.
Overall, do your research, reach out to the professionals, stick to your budget and be sure you are ready to take on the financial responsibilities of being a homeowner.
THE MORTGAGE PROCESS
We know that it is your first time purchasing a home. Therefore, we want you to know upfront what you can expect from the mortgage process when buying a home, applying for your mortgage, and closing on your loan.
Discover how the home loan process really works while removing all the possible uncertainty of buying and financing a home.
MORTGAGE QUALIFICATION
Knowing your options will definitely make the mortgage process easier. Your dream home may already be within your reach, all you have to do is qualify.
But the big question is how much do I actually need to qualify?
CREDIT SCORES
Credit score range for qualification
DOWN PAYMENT
As little as 3% down
STABLE INCOME
Proof of stable employment
ITEMS NEEDED TO QUALIFY
FULFILLING THE
AMERICAN DREAM
As we look around us, one of the truest and longstanding notions is that the United States is the land of opportunity. With that fixed sentiment, the American Dream of Homeownership still continues to exist.
Although many perceive the journey to homeownership to be highly stressful, the end result is highly valuable. We know this is probably one of the most significant financial transactions you will ever make, but just remember, you are not alone.
Many other individuals like yourself have not given up on the American Dream of Homeownership, just know that we are here to help make that vision an ultimate reality.
Ready to Take the Next Step?
Get in touch and let's discuss your first-time homebuyer journey. I'm here to help make your dream of homeownership a reality.
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Piero Cornejo
Branch Manager
I specialize in helping first-time homebuyers navigate the mortgage process with confidence. From understanding your options to securing pre-approval, I'll guide you every step of the way to homeownership.