What First-Time Home Buyers Need to Know

Dreaming of owning your first home? Tired of shoveling out rent for a home or apartment that doesn't feel like yours? Changing from renter to homeowner may be easier than you think. We're here to help.

A home is likely the biggest purchase you will ever make. Now is an ideal time to buy your first home. Low-interest rates are making home loans more affordable, especially if you have excellent credit scores. Here are some tips that you can use as a first-time home buyer in Fort Rucker or Enterprise, AL.

Where to Start When Buying Your First Home

For a successful buying process, you need to prepare at least one year in advance. Begin by paying off your debt, including credit cards. Look at your income and expenses in order to find out how much of a monthly payment you can afford. Use a mortgage calculator to do this. Don't forget to include property taxes and homeowners' insurance as well as your mortgage payments. Save for the down payment and closing costs. An ideal down payment is 20% of the home's sale price. Closing costs are usually 2%–5%. Get pre-approved for a loan.

Look for a Home

Do some research about the best neighborhoods, including the local schools. Then find a real estate agent and start looking for homes. Tell the agent your budget. If you can afford a $250,000 home, tell the agent you want to look at homes priced $240,000 and lower. This gives you wiggle room for negotiations. Through your real estate professional, make an offer.

Types of Home Loans for First-Time Home Buyers

There are several loan programs for first-timers who are buying a home. A VA loan is available to veterans and active members of the United States armed forces. These loans allow you to finance 100% of the home's purchase price. You can choose a lender for FHA loans. It is worth shopping around to find the best mortgage rates and terms.

Resources for First-Time Home Buyers in Enterprise, AL

First-time home buyers in Enterprise and Fort Rucker can access several different programs and resources. One resource is the down payment assistance program, which features assistance to home buyers who have trouble saving 20% for a down payment but have a regular source of income for paying the mortgage payments. Another resource to look into is the mortgage credit certificate program, which allows residents to deduct up to 50% of their mortgage interest on their annual tax returns. The state of Alabama also offers verification of real estate licenses, home builders and home inspectors. This protects the finances of Alabama residents and provides peace of mind when choosing professionals in real estate.

Where do you start?

First of all, learn the financing basics. Get pre-approved and become a smart shopper.

When you buy your first home, making monthly payments probably won't be a problem. After all, you're already paying rent to your landlord each month. It's coming up with the lump sum needed for a down-payment that may seem impossible. Fortunately, there are options to make buying your first home a happy reality.

Programs for first-time buyers. There are several local or federal government programs that help first time buyers get into the housing market. Ask us about these options.

Your lender. Your bank or credit union may help as well. Are you debt free and own something free and clear, like a car? Your lender may lend you the down-payment by securing it against this asset.

Private contracts. Look for a seller to help you buy and finance your home. Some sellers are willing to carry the contract themselves and will waive the down payment. You may only have to pay the monthly mortgage installments.

Need financial solutions?

Credit or tax problems. Do you have problems with your credit rating or owe money in taxes? Buying your first home is still a possibility. Check with your lending institution about options, such as paying a higher down-payment.

If necessary, contact a financial advisor or tax resolution service.