According to research, Rents have increased over the last few years, leading millennials to research the potential of home buying instead of renting, when rents begin to equal the average monthly housing payment it makes sense to buy rather than rent. for tax purposes you receive a $60 renter credit from the state and as a home owner you are able to write off the mortgage interest, reducing taxable income which equates to a higher tax refund for the homeowner. Housing prices have continued to rise in California which results in positive equity it is more important than ever to take a practical approach when you’re looking to own your own home.
Fortunately, there programs specifically available for first-time home buyers. will allow more young people to make homeownership a reality.
Saving for a Down Payment
In the industry, it’s well known that the best mortgage products, rates and terms are available for those who can offer the largest down payments. However there are first Time home buyer programs that can allow 100% financing and down Payments as low as 1% or 3% There are also Down payment assistance loans available to make it easier to be a H.O.M.E. owner. There are other loan to reduce this mortgage insurance by offering a conventional loan with a down payment as low as 3% or 5% as an alternative to FHA financing
It’s important to understand, however, that these mortgage loans will require you to pay private mortgage insurance (PMI) premiums to further insure a lender against default. Paying these premiums each month will increase your monthly mortgage expenses.
Building an Excellent Credit History
Another important component of a borrower’s credit-worthiness is their credit history, or credit “score”. This shows the lender your history of making timely payments and gives insight into how responsible you are as a borrower.
Although there are loan programs that will use a low credit score (between 580-620) The best rates for mortgages go to those who have scores above 640 and the rates improve as credit scores are increased to above 680+ If you’ve had any credit issues in the past, it’s important to clean your credit score up to allow you the most advantageous position when shopping for a mortgage. By pulling your credit and cleaning up any disputes or misinformation, you make it more likely of being approved for better rates and terms when it comes to mortgage shopping.
Reducing Your Income to Debt Ratio
Lenders will look closely at a potential borrower’s income to debt ratio. Prior to house shopping, it’s important to call H.O.M.E. Lending for a credit analysis to make a best determination of how you may want to proceed or to discuss which loan options may be best for you
Get Professional Advice If you are looking for your first home and need advice about mortgage lending in California, call our mortgage advisors at H.O.M.E. Lending. We serve the San Joaquin and Stanislaus counties and throughout the state of California for any mortgage needs you may have. We can help you by advising you and finding lending products and programs specifically geared to first time home buyers. Call us today at (209) 477-0262 or apply online at www.GetHomeLending.com
