One of the many goals of almost every rent-paying adult is to be a home-owner. It can be quite expensive in the long-run to keep paying rent for a lifetime, and this is for a home that you will eventually never own. Nobody wants that, hence, the question you may now be asking is, what do you need to know before purchasing your first home?
Financing
Whether you are interested in buying a move-in ready property or building your home from scratch, there are a couple of things you have to figure out. However, this is first before rushing to become a homeowner.
A major consideration for potential homeowners is financing. Will you take out a mortgage? How much mortgage can you afford? What type of mortgage will you take out? What is your debt-to-income (DTI) ratio? What is the reliability of your main source of income from which you will pay out your mortgage?
The above are questions that you need to ask yourself and give yourself honest answers. Both first-time homebuyers and experienced homebuyers can receive financial help. However, the help is from the USA state programs, tax breaks, and federally backed loans.
Housing Loans
Apart from USA state programs, there are county-specific housing financing programs. For example, in San Bernardino, the USA’s largest county, offers a wide range of avenues for veterans to invest in their individual homes. You may want to check the loans and services in your area.
Most of these lenders follow the Federal Housing Finance Agency’s (FHFA) conforming limit. These are like the VA loan limit San Bernardino, which is yet relevant because of two reasons.
One of the reasons is lenders are keener on loans above this limit, determined by the loan size. The other reason is that if you are a VA borrower wanting to buy a home costing more than the latest maximum loan conforming amount, but you lack a down payment. Therefore, you may need to consider a VA jumbo loan product to finance a home purchase.
There are changes to this VA loan limit, but the 2020 limit in this county was $510,400.The V.A will now guarantee loans without initial payment above this figure for veterans who have full V.A loan rights. Those veterans who have used their loan entitlement before, worry not as there are ways to relinquish your full entitlement and take advantage of the new rules.
A VA loan expert is best suited to give more insight into these loan rights. Another change to look out for is that most active duty veterans will increase VA Funding Fee. However, reservists will see a decrease. Payment of the VA Funding Fee is now exempted from the Purple Heart recipients. SoCal VA Homes’ mission is to provide veterans with solutions to buying homes, such as the Dreamweaver Home Purchase Process.
Preparing To Buy Tips
Now that you have figured out your finances, this is your budget. You’re good to go. Unfortunately, this is not quite the case, especially if you are looking to buy a family home. You still have to think about the school district, the proximity of your home to social amenities such as hospitals, and the city, security, and crime rates in the area. It is important to do your due diligence to avoid future disappointments or getting into any legal trouble. At the very least, get a home warranty and a clear title.
Getting your finances in order is the foundation on which your dream of one day buying your first home lay. Hence, you can kick-start your home dream by starting to save early. Build and strengthen your credit. It is also important to stay informed on the current legislation, and this is on homeownership from the multiple sources available, even online. Eventually, all these steps will bring you closer to being a home-owner.