Over the past few years, first-time homebuyers have been reluctant to enter the market because of flat wages and mounting debt. However, times are changing. If one is buying real estate in Ames, the prospect of getting a mortgage may be daunting. For most, a home is the investment of a lifetime, and few can pay cash. Below are some helpful hints for first-time homebuyers.
Save for a Down Payment
Most lenders require a down payment of up to 20% of the home’s sale price. Buyers may find it hard to amass such a large payment, especially if they are under a mountain of student loan debt. PMI (private mortgage insurance) is the traditional way out for clients of who cannot afford a large payment, but today’s lenders are offering assistance programs.
Consider Improvement Costs and Household Expenses
With today’s low inventory of homes suitable for first-time buyers, many find themselves settling for “fixer-upper” homes. Renovation and repair costs should be considered at the beginning of the finance process, so the buyer is OK with their monthly and down payments. If a buyer is living on their own for the first time or if they previously rented, the additional costs can be a big shock. By considering household expenses during the mortgage-financing phase, a borrower can get a clearer picture of their budget.
Everyone knows that buyers have the best experience when they can communicate effectively with the lender. Finding the right lender and discussing one’s budget and financial needs should be the buyer’s first step. Saving for the down payment is a roadblock to homeownership for a significant number of people, and it is important to find a mortgage lender that will help the buyer understand their options.
Get an Education
The most important aspect of buying real estate in Ames is for the buyer to understand the mortgage process. First-time buyers should take courses at local finance institutes, and they should utilize government programs. These programs address all parts of home loans, starting with helping the buyer decide whether they are ready for homeownership. While home buying may be an overwhelming prospect for the uninitiated, finding a trustworthy lender will guide the person in the right direction.