How does the dream of home ownership sound to you? It should sound great! However, if you are a first time home buyer, you are probably a bit overwhelmed with how to turn this dream into a reality. Especially during these crazy, unprecedented times that we are facing with COVID-19.
Having gone through purchasing my first home in 2016, I can certainly relate to the challenges with going through your first home purchase. How will I save up for a down payment when I am bogged down with all of my recurring bills - rent, cable, electric, cell phone, food, student loan debt, etc?? Figuring out the financial end of things is the greatest obstacle to get by in order to purchase your first home. As a real estate agent who loves the Maryland area, I hope that I have the opportunity to guide you through the process and get you in the home of your dreams!
There are many myths surrounding home ownership. The greatest myth for first time home buyers is that it is essential you put have 20% as a down payment. On a $200,000 home, you would need $40,000 for only the down payment! This is simply not the case as there are many programs available that allow you to put anywhere from 3 - 5% down. You can choose a more standard financing route - Conventional, FHA, USDA, VA. All of these programs have varying requirements for down payments and credit scores. Or, you may be able to take advantage of the Maryland Mortgage Program. Through this state program, there may be grants or loans available to help with the down payment and closing costs. You'll want to confirm that you qualify as a first time home buyer, which normally means you have not owned a home for 3 years.
Another myth for first time home buyers is that you need to have a high credit score. While a high credit score is encouraged as it will get you the best terms, you might be surprised to find out that home ownership might still be possible with a lower credit score. Conventional loans typically require higher credit scores as they are not government insured loans. FHA (Federal Housing Authority) loans are government insured and could be an option for you. If you have a credit score around 580, you may be able to secure this type of loan. If having a low credit score still makes you nervous, there are definitely things that you can do to improve your score. Make sure you're paying your bills on time, pay your debts down, avoid opening new credit cards, and check for any errors on your report.
Another important thing to keep in mind is finding a local real estate agent that will guide you through the process. Working with an agent does not cost you anything (the seller typically pays for their portion of the commission at closing). An agent knows the area, can get you in touch with lenders, and can research properties for you. When you're ready, they'll set up appointments and visit the properties with you. An agent can also set up an automated search for you based on your criteria using the MLS (Multiple Listing Service). When new markets come on the market, you'll have access to that information. Information from the MLS is typically more up to date than popular sites such as Zillow, Trulia, Realtor.com. This could give you an edge in seeing homes sooner than others.
If you would like more information on purchasing your dream home in Maryland, please feel free to reach out to us using the contact form on the right or giving us a call. We would be happy to help you in your new journey!
