Help­ing first-time home buy­ers get to ‘I can’

Cecil Whig - - OURCECIL -

— Fi­nally! The econ­omy is im­prov­ing, in­ter­est rates are low and many con­sumers now find them­selves in a great po­si­tion fi­nan­cially to be­come a first-time home­owner. There’s a small prob­lem­lem though for some lo­ca­tions around the coun­try — the boom­ing real es­tate mar­ket is re­sult­ing in ris­ing home prices and in­creased com­pe­ti­tion for the most de­sir­able prop­er­ties.

The S&P/Case-Shiller na­tional home-price in­dex re­cently es­ti­mated that 2016 prices are within four per­cent of the peak in 2006. In some ar­eas, low in­ven­to­ries around the coun­try are mak­ing the sit­u­a­tion even more chal­leng­ing.

These con­di­tions are in­tro­duc­ing first-time buy­ers to com­mon chal­lenges and frus­tra­tions while search­ing for their dream home. “Don’t get dis­cour­aged,” says Travis Peace, ex­ec­u­tive di­rec­tor of mort­gage at USAA Bank. “Buy­ing a home re­quires some for­ti­tude and the process in­tim­i­dates many -not just those do­ing it for the first time.” As a re­sult, Peace says it’s easy to con­cen­trate too much on home buy­ing “can’ts” rather than “can-dos,” and he of­fers this ad­vice on how to over­come some com­mon bar­ri­ers.


“I Can’t” No. 1: I can’t fig­ure out the home-buy­ing process.

Peace notes that it’s es­sen­tial to do re­search and to be equipped with ba­sic in­for­ma­tion, but also be will­ing to ask for help when needed. For ex­am­ple, an ex­pe­ri­enced real es­tate agent can keep a buyer ap­prised of ev­ery­thing from area sales trends to the lat­est changes in state and fed­eral laws that could im­pact a mort­gage ap­pli­ca­tion.

“This is where ex­pe­ri­enced, li­censed pro­fes­sion­als can help,” Peace says. “Real es­tate agents can be an ad­vo­cate for the buyer through­out the en­tire process.”

In ad­di­tion, free tools like USAA’s Real Es­tate Re­wards Net­work can con­nect buy­ers with an agent and even pro­vide re­wards based on the sale price of the home.

“I Can’t” No. 2: I can’t find the perfect home for my fam­ily.

Find­ing the perfect home may not be re­al­is­tic, but shop­pers can find the right home. Per­sonal sit­u­a­tions will dic­tate buy­ers’ abil­ity to wait for a home in a par­tic­u­lar neigh­bor­hood or de­sign style to come on the mar­ket, but not ev­ery­thing has to be left to chance.

Peace says the key is to set re­al­is­tic ex­pec­ta­tions and not fix­ate on neg­a­tives that can be changed. “Whether it’s the num­ber of bed­rooms or dis­tance to work or school, it’s al­right to have some non-ne­go­tiables. How­ever, buy­ers should be will­ing to be flex­i­ble on things that can be rel­a­tively easy to change, like paint col­ors or land­scap­ing.”

“I Can’t” No. 3: I can’t af­ford a 20 per­cent down pay­ment.

Putting 20 per­cent down on a home has be­come more of a guide­line than a rule. To­day, not be­ing able to put 20 per­cent down does not mean buy­ing a home is out of reach. Peace notes that de­pend­ing on a buyer’s fi­nan­cial sit­u­a­tion, there may be a re­spon­si­ble way to get into your new home with­out putting 20 per­cent down.

Gov­ern­ment- spon­sored loan pro­grams from the Fed­eral Hous­ing Author­ity, Fan­nie Mae and Fred­die Mac pro­vide loan op­tions that re­quire down pay­ments as low as three per­cent. Veter­ans Af­fairs (VA) loans don’t re­quire any down pay­ment. While those pro­grams are of­ten great op­tions for con­sumers who qual­ify, Peace notes that buy­ers should keep an eye on their po­ten­tial to­tal monthly pay­ment.

“Some of these loans in­clude fees and pri­vate mort­gage in­sur­ance (PMI) that could sig­nif­i­cantly im­pact your over­all cost,” Peace says.

Even pri­vate lenders are of­fer­ing more com­pet­i­tive loan op­tions. For ex­am­ple, USAA Bank’s Con­ven­tional 97 loan al­lows bor­row­ers to ac­quire a mort­gage with only three per­cent down and the bank pays the PMI costs.

Scott McEniry, a USAA mem­ber, re­cently moved into his new home with the help of the Con­ven­tional 97 loan. “It felt like a life­line had been thrown to me as sud­denly a house pur­chase was within reach again,” McEniry says.

Whether a house-hunt­ing novice or sea­soned ex­pert, Peace un­der­scores that be­ing in­formed, get­ting the right help and hav­ing a healthy dose of de­ter­mi­na­tion are the best ways to turn a dream home into a re­al­ity.

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