It’s Take a Tip Tuesday and this video is perfect for first time home buying. For some, it can seem like it is out of reach but with interest rates still being historically low now is still a great time to be a first time home buyer. Buying a house can be thrilling and nerve-wracking for a first time home buyer. The learning curve is steep, but doing a little financial homework will help you navigate the process. This week in this video I help you with some steps to first time home buying that gets overlooked by many. The process of buying your first home doesn’t have to be as scary as some make it and in the long run, you may be making the best financial decision if you play your cards right.
*When should you buy your first home?
Are you eligible for a fair mortgage, with payments you can afford. If you have an established job and have paid your bills on time, you have money saved and can afford a small down payment. There is a big myth especially for people who haven’t bought a home in years is that you have to have 20% down in order to buy your first home. Although this is great if you have the money it isn’t the only way to buy a home. With FHA loads you can have as little as 3.5%, for A USDA home loan is a zero down payment mortgage for eligible rural and suburban homebuyers. USDA loans are issued through the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program. Even some conventional loan packages have lower down payment requirements. (Please speak to your lender about rates and loan packages, I am not a loan officer and can not advise you on loan types or packages that work for your financial needs)
*Not Going Anywhere For A While, Then BUY.
If you have no plans on switch jobs or locations for several years than buying your first home (especially in Ascension Parish) is the best option. Currently the average home rents in our area for about a .00 per square foot. For a home that is 1500 square feet, that’s 1500 a month in rent. That same home could be purchased for around 0,000 (4.92 interest rate) making the loan payment 798.00 plus property taxes and insurance and we will say 1200 for taxes a year and 1200 for insurance a year these are high estimates for Ascension Parish. Your mortgage payment would only be around 1000.00 a month and you’d save 500 from not paying rent.
*Add a little Blood Sweat AND Tears!
Your first home may not be your “forever” home. Most people when they purchase there first home go in knowing they going to have to put in some “sweat equity” by doing minor repairs and upgrades to a home. When you rent you can NOT do anything to the home, you can NOT paint a room, remove old carpeting or change out any lighting, you stuck with what the landlord has installed and for them “if it ain’t broker don’t fix it” is their motto.
*Rent Out Space in the Home you Purchased.
Check with the mortgage company that you will be using and see if they allow you to rent space in your home. If you can get someone to help with the cost of living you really win the buying game. You can take the money you saved and invest in repairs or pay down your mortgage even quicker. Extra payments add up. A 0,000 30-year home loan with an interest rate of 5% would cost 6,512 in interest with the traditional 12 payments a year. Make the equivalent of 13 monthly payments every year, and the loan will be retired in 26 years and you will pay only 3,813 in interest — a savings of ,699
Tax Break on Mortgage Interest
The first few years of paying on your mortgage, the majority of your payment will go to paying on the interest. You can deduct a percentage of your interest from your taxes. This can help you reduce the overall amount that you pay in taxes each year. It is an additional perk to owning your own home.
I hope you found these tips for first time home buying useful. If you’d like some more tips on buying your next home check out my buying a home playlist here. https://bit.ly/2sw5Pu1
If you don’t want to miss any tips on buying and selling your home so you don’t leave money on the table at a closing time click here https://bit.ly/2sHfDRr
To look for properties in the Baton Rouge and Ascension Parish area click here: https://goo.gl/Pfi9W9
Copy of my FREE Ebook For Buying In Ascension Parish: https://goo.gl/ux3mYz
To read my blog about buying and selling a home visit yourrealestatewhisperer.com
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Kristina Smallhorn is a licensed REALTOR® with the state of Louisiana, License #0912122918
First Time Home Buying