It’s no secret that home financing can be more of a challenge nowadays than it was during the housing boom. But with rents on the rise, many families are caught in middle, wondering if it makes more sense to buy or rent. Can you qualify for a loan?
We recommend that families talk with their favorite Realtor(R) or mortgage broker to determine if buying a home is right for them. You might be surprised at the number of programs and services that exist to help potential homeowners secure financing for a home purchase.
If your credit score is 600 or higher, and your debt-to-income ratio is reasonable, you will find no shortage of financing options. Even buyers with less-than-stellar credit ratings have options, including the following:
- In Alachua County, qualified buyers can finance up to a $271,050 home using an FHA loan. One major benefit of FHA loans is that buyers only need 3.5% of the purchase price as a downpayment, compared to the 20% required by standard loans. FHA loans can sometimes be attained by buyers with a bankruptcy as recently as 2-3 years ago.
- One new neighborhood in our local area, Savannah Station, is offering “no money down” and “no closing costs” deals to attract new home buyers. In this case, it’s possible to buy a brand new home for less money per month than you could rent a comparable home. New home builders often facilitate financing deals to help buyers purchase their homes. If you buy a home under one of these arrangements and you were previously accustomed to living in rental homes or apartments, don’t forget to save for home and appliance repairs you may encounter after you own your new home.
- Sometimes a motivated home seller will be willing to pay closing costs on the buyer’s behalf if your Realtor(R) negotiates this into the contract. Talk with your Realtor(R) and allow them to guide you towards homes where this may be possible. This will decrease the amount of cash in hand you’ll need to close on the home which may allow you to allocate more of your savings to paying down debt.
- Interest rates remain at historic lows, allowing you to save money every month on interest. Many are speculating about how long rates will stay low, but no one knows for sure.
After considering these options, if you still feel that you need help qualifying for a loan, put some time into improving your credit score and paying down debt and revisit the issue in several months. If you’re ready to explore some of the options outlined above, give us a call.
Please don’t hesitate to contact your dynamic duo at GainesvilleRealtor.com with questions or for more information about buying a home in this economy. We are here to help!
When you think Real Estate, Think Rabell!
Henry & Linda Rabell
cell (352) 258-1114