If you feel tense about Buying a Home in San Diego, you are not alone. Many people fear they will not qualify for a mortgage, and put off applying for one as a result. Don’t let this common misconception hold you back. Find out what your buying power is. There is a good chance that you are eligible for a loan and do not know it.
Below are tips that will help you with Buying a Home in San Diego with confidence
1) Home-Buying Counselors
Speaking one-on-one with a certified counselor is a great place to start. The U.S. Department of Housing and Urban Development (HUD) provides consumers with free or low-cost counselors that can help you become educated on the various aspects of Buying a Home.
There may be tools available to you that you are unaware of, and a counselor can point them out to you. Have you heard of an FHA Loan? A common misconception is that a buyer needs twenty percent down in order to buy a house. With a credit score of 580 or higher, you could get FHA loan (a mortgage insured by the Federal Housing Administration) with a down payment as low as 3.5 percent.
Additionally, if you are a veteran, you maybe be eligible for a zero-down loan through the U.S. Department of Veterans Affairs. Click here to find a counseling agency near you . If you would like a list of local lenders that we have been working with for many years, let us know and we can send you their contact information as well
2) Do your Own Research Upfront
The more you know about mortgages, the less intimidated you will feel. Learning a few basics will greatly improve your confidence when applying for a mortgage. In addition to Mortgage counselors, there are many resources available online to help you get you up to speed. For example, NeighborWorks America, is a non-profit organization devoted to educating consumers on homeownership, has tools and information available on buying your first home.
3) Determine your financial situation
Sit down and crunch the numbers. You’ll need to determine your gross income - the money left over after health insurance costs, contributions to retirement/savings accounts, etc. As a general “rule of thumb, housing expenses should be no more than 30 percent of gross income. Keep in mind that often there will be maintenance costs such as fixing an unexpected leak in the roof, clogged plumbing, ect. Set aside a minimum of $5,000 thousand for these costs.
After assessing your financial situation, you may find that it’s not the best time for you to buy. If this is the case, you can determine what steps you need to take to prepare yourself for confident home-ownership.
4) Explore Different Options
Don’t jump at the first mortgage loan you are approved for. If you have started working with a local Realtor, ask them for a few different lender referrals. Getting quotes from different lenders will give you options to choose from, and the power to negotiate a better rate, saving you money. Preparing a list of important questions for lenders will help you compare them and choose the right one. Also, be aware that renegotiation of mortgage rates is possible even after you lock your rate in. There are also fees that some lenders can remove or assist you in paying for closing costs. Ask your lender about these options as well as the different types of loans out on the market that will suit your needs.
5) Work with An Experienced Local Realtor
Reach out to a few local Realtors. Drive through the neighborhood where you would like to buy a home. If you keep seeing the same Realtor on signs of homes that have just sold, give them a call. Ask your friends or co-workers for referrals. If they have had a great experience with their Realtor and or lender, they will happily give their contact information out. Call the Realtor and make a phone or in-person appointment with them. If you feel that you will make a good fit, work with them. They will be able to guide you through the process and complexities of Buying a Home. They will be in constant communication with whichever lender you end up choosing and together, be able to help you through the process of finding the perfect home for you with the best loan possible that you feel comfortable.
Conclusion - Know that you are building Wealth
Property Value in San Diego has steadily risen since 2012 and continues to rise. When you buy a home, you are making an investment that will appreciate in value, and as you pay off your mortgage, you are building your wealth.
If you would like to speak to the McT Real Estate Group about the possibilities of Buying a Home in San Diego, contact us right away. We would love to help.