4 common homebuyer fears and how to face them

If you’ve been thinking about buying a home but haven’t yet, what’s stopping you? For many buyers — especially first-time homebuyers — it’s a set of common fears that seem hard to overcome. In fact, according to a recent study from Lending Tree, 51 percent of respondents say they’re worried they’ll never own a home for four common reasons.

Because these reasons are so common, it’s important to know that there are always ways to work toward that dream of homeownership. Here’s what you should know about those 4 common fears.

Lenders typically recommend that a down payment is 20 percent of the price of a home. For example, 20 percent of a $300,000 is $60,000. For potential buyers who are just starting out, that number can seem daunting. Fortunately, it’s also not always necessary to have that much money saved.

A report from the National Association of REALTORS® (NAR) shows the average down payment for buyers is just 14 percent, and first-time buyers can often find loans that allow just 3 percent down. That’s $9,000 on a $300,000 home. What’s more, North Carolina residents have access to the North Carolina Housing Finance Agency, which will provide first time buyers with up to $15,000 in down payment assistance for homes listed up to $480,000. Talk to a local lender, such as Towne Mortgage of the Carolinas or North State Bank to learn how to take advantage of these programs.

Too often, people are afraid of their credit, so they avoid dealing with it altogether, rather than looking to see if credit may be a stumbling block on their way to home ownership. You should approach home buying from an informed place, and check in on your credit’s health to figure out what might need to change.

Start by talking to a lender about pre-approval, which will give you a full picture of your current credit status. Pre-approval gives potential buyers the opportunity to see a clear picture of what can help or hurt while trying to obtain a mortgage. While a pre-approval does expire, they are good for 120 days, which means you can work on improving your numbers. Or it may empower you to wait to buy a home after you’ve found what may need to be improved upon. Talk to your lender for advice on how to best approach credit repair if that is necessary.

First-time homebuyers tend to be concerned about what monthly payments on a new home might be. Lending Tree’s report shows it’s due to their concerns over down payment, home prices, and interest rates. However, it’s important to remember that the purchase of a home means you’ll be building equity into an asset that ensures your wealth over the long term.

Be sure to talk to a local lender to get a clearer picture of what your payments might be. Towne Mortgage of the Carolinas and North State Bank will help you look at the larger picture, which includes what your payment might be. However, they will also help you see the financial benefits such as the future possibility of refinancing and tax write-offs that will help at tax time as well.

Lending Tree’s survey shows debt is one of buyers’ top concerns, specifically due to student loan debt. Your debt-to-income ratio is one of the metrics lenders use to determine the type of mortgage you qualify for and the amount you can afford. Having a clear picture is critical to seeing what’s possible. And it’s why a local lender is the best place to start.

Your lender will be able to help you work through your debt to best understand how to approach it and what can be done to get you into a home. Whether it’s figuring out a strategy to help you pay down credit cards or get approved with school loan debt, your lender can help significantly.

Homeownership may not be as far away as you think. Don’t be afraid to reach out to a local lender like Towne Mortgage of the Carolinas and North State Bank early in the process to get an accurate picture and to see what’s possible. It will be worth it to obtain your dream of homeownership.

The Jim Allen Group provides access to information on this blog/website as a public service for educational purposes only. Although reasonable efforts have been made to ensure that all of the information made available is current, accurate, and complete…[read more]