First Time Home Buyers
In a great deal of real estate markets, coastal ones in particular, many prospective first-time home buyers are having a difficult time getting their foot into their first front door. Being a Certified Mortgage Planning Specialist who works mainly with first-time buyers, I have witnessed the struggles of a lot of buyers who could not find their dream home at a price that met their budget.
Why are they so frustrated? Their expectations are too high. The majority of first time purchasers expect at least a brand-new or almost-new, one-family house with several bedrooms and a couple of baths, all in terrific shape, and on a big plot of ground in a desirable neighborhood. They want what they see their parents owning, forgetting that it took their parents many years of hard work to get it. Sorry, kids; the reality is that this kind of residence isn't and never was the kind of house a first-time buyer can afford. It's an upgrade for people who originally purchased small 2-bedroom, 1-bath bungalows or attached housing when they could afford them. If people have additional debt such as car payments, student loans or credit card debt, even these smaller homes may be too costly.
So just what does someone have to do to buy a home for the first time?
(1) Consider something older and smaller. Throughout the 1950s, hundreds upon thousands of veterans coming home from World War II bought their first houses -- tiny two- and three-bedroom, one-bathroom houses where family units of four or five lived for several years before moving into a bigger three-bedroom, two-bathroom house. There are still little houses like this around, and they're great for first-time purchasers looking to make an initial foray into the real estate market.
(2) Contemplate fixer-uppers. Because they need to be updated, a lot of homes may be purchased for below market prices. There are plenty of homes in this category. They're perfectly fine to live in as-is and can be renovated over time as you have the financial means.
(3) Shared housing is something to think about. You might start out co-owning a home with compatible people who all want to purchase one eventually. It can help people enter the housing market when they have more than one income to contribute. Because this is basically a business arrangement, a deal should be made before the purchase, stating each individual's responsibilities along with the disposition of the property under established, outlined circumstances.
(4) Consider something for more than one family. With a two-family or three-family dwelling, you can recover some of your financing money by inhabiting one part and leasing the other(s).
(5) Consider what is known as a manufactured home. I'm not talking about some kind of house on wheels. Modern manufactured homes are generally well-built with desirable amenities; they're affordable and spacious. With as little as 3.5 percent down payment, FHA financing lets you get into these easily.
If you get your head out of the clouds and back down to earth, you'll find there are a lot of different ways to be a homeowner. Everyone has to start somewhere, and this generally isn't at the top. When you buy a house for the first time, remember that it is just that -- YOUR FIRST HOUSE. According to statistics, you may own up to 5 houses over the course of your life. Some might own more, and some might own less. But if you hold off for the perfect "castle", you may never be in a position financially to purchase your own home.
To get started, click on the Free Purchase Assistant analysis tool below:
You can discover what First Time Homebuyer Mortgage Rate you qualify for using our free Interest Rate Tracker, and then use our Mortgage Calculator to work out your payments.
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Call First Priority Financial today at 510-614-2433 to discuss your California Loan options.
