Ways First-Time Buyers Can Avoid Getting Priced out of the Seller’s Market
If you’re a first-time buyer, you know the drill. After years of stagnation, the housing market has suddenly picked up, especially in historically undervalued markets like Houston. Bargain real estate deals have been replaced by low neighborhood inventory and bidding wars.
The seller’s market is a big positive, because it points to nationwide economic recovery, but for a potential first-time buyer, it can mean getting priced out of your target neighborhood or suddenly not having enough money to make a down payment. Here are some tips for not letting those things happen to you.
Get Creative about Your Down Payment
Consider tapping into your 401k or using Roth IRA contributions. First-time homeowners can avoid the 10 percent tax penalty on early distributions, giving you more incentive to remove the money in order to finance your down payment.
If you have no retirement funds, you might instead take a long hard look at your priorities. For instance, downsizing to a less fancy car or even selling one family car may be an option if you need to raise cash.
Take Advantage of Less Traditional Loan Options
If you qualify for a VA Home Loan, these loans don’t require a down payment, and because the federal government guarantees the loan, the interest rates are lower than with a traditional loan.
Another option is to ask the mortgage company you choose about purchase a distressed home — that is, a house that is in foreclosure or a short sale. The FHA 203(k) loan lets you roll the cost of minor renovation right into the loan itself. Choosing this option requires dedication on the part of both you and your lender, but persistent first-time homeowners can get a bargain if they follow this route.
If you are a first-time buyer in this seller’s market, you need to be proactive and think ahead, adjusting your spending habits for at least a year before you buy in order to have a cushion of cash so that you can pre-qualify for the loan amount you need. Choosing a mortgage company Houston real estate agents and clients trust to make deals happen also positions you to get the best possible terms on your loan.
Interested in Getting a Mortgage Loan?
With a reputation for quick loan processing and individualized customer service, Mortgage Loans for Texas is fast becoming one of the best mortgage companies in the greater Houston area.
Contact Corey or Damon today to see how easy it can be to own your first home.