In my 35 years as a mortgage originator and exclusive buyer’s representative, many prospective homebuyers have told me that they are delaying their purchase because of lack of money and/or their credit history. In some cases, delaying the purchase is necessary and prudent. However, in many cases the delay is unnecessary, resulting in a higher payment, a less desirable home, or being priced-out of the market. There are a number of financing options available to help you buy a home sooner than you thought possible.
Delaying your purchase will likely result in paying more for the home you eventually buy with a larger mortgage payment.
Rates are at historic lows and all the experts expect rates to rise a full percent later this year or next. A one percent increase in the rate on a $300,000 mortgage increases your payment by $180; if property values increase by 10%, your payment will increase an additional $161 a month, resulting in a total increase of $341. If you can afford the higher payment, it will cost you considerably more to own the home you want; if you can’t afford the higher payment, you will end up with a less-desirable home and/or a longer commute.
If your credit scores are low; you can sometimes increase them significantly by utilizing my credit bureau’s rapid re-score feature.
You will receive a report instructing you on exactly what needs to be done and your resulting score; in many cases, these improvements can be achieved in days.
A number of financing programs allow low credit scores. Some FHA and VA lenders will accept a 580 score and finance borrowers without traditional credit by verifying rental payment history and utility payments. USDA financing is available to buyers with 600 or higher scores; conventional financing generally requires a score over 640.
Lack of funds should not prevent you from buying the home you want.
Lenders offer a number of financing programs with little or no down-payment. VA and USDA programs do not require any down-payment. FHA has a 3.5% and the first-time homebuyer conventional program has a 3% down-payment requirement. The local Regional Housing Alliance (RHA) has many programs to get buyers into homes for less than a 3% investment. In all cases, you can get a gift for any required down-payment and the seller or lender can pay 100% of your closing costs.
If homeownership is your goal, waiting will be very costly.
Many lending guidelines have been loosened over the past few years. So even if you were told that your scores were too low or you didn’t have sufficient funds in the past, you should contact me to schedule a free, no-obligation consultation to learn about your current options. You may be pleasantly surprised.