Now that I’ve moved beyond the strange period of life that was my twenties, one major conversation topic among my friends is real estate. These days, it feels like we’re always talking about which one of us just bought a home or is looking to buy. Another major discussion topic is where these particular friends found the money to buy their homes–was it an FHA loan? Did they receive help from their parents? And, at the risk of sounding tactless, how much exactly did they put down, and what was the home’s final price?
The question of where to find the money to buy a home is fairly common these days. Luckily, Pickett Street’s home buyers class, which is offered once a month and is completely free (!), is an excellent resource. The next home buyers class is Tuesday, August 21st from 6-8pm. The Pickett Street team and Cody Touchette of Caliber Home Loans will be there to talk about the home buying process from start to finish. To find out more, contact Sarah Troske at sarah@pickettstreet.com.
For now, here’s some insight from the class into how to secure financing to buy a home.
1. Conventional loans
Available with both fixed and adjustable interest rates, these loans feature down payments beginning at 3 percent. Higher loan amounts are available for these loans. You can also cancel your mortgage insurance after building equity.
Home Possible mortgages are conventional loans for low to moderate-income home buyers and require 3 to 5 percent down. Only home buyers whose income falls within a certain bracket are eligible for this type of loan. These loans are for one to four-unit homes.
HomeStyle Renovation mortgages include financing for renovations and other home improvement projects. This type of loan allows buyers to complete home repairs without taking out a second mortgage or relying on a home equity line of credit.
2. FHA loans
FHA loans are government-insured mortgages, which generally have easier qualifying requirements. The perks of these loans include low down payments and easier credit score requirements. Fixed-rate or adjustable mortgage rates are available.
FHA 203(k) loans offer you additional funds for renovations before moving in to your new home. HUD REO loans are granted to individuals buying foreclosed properties and only require $100 down.
3. $0 down options
There are a few options for home buyers who are unable to make a down payment. State bonds can be used with FHA or conventional loans. USDA (US Department of Agriculture) loans provide financing to low to moderate-income individuals who are buying homes in eligible rural areas. Finally, VA loans are offered to members of the military, veterans, or eligible surviving spouses.
4. A few more things to keep in mind
Pickett Street also suggests their favorite home buyer house hack: buy a multi-family property such as a duplex or a three or four-unit home. You can then live in one of the units and rent out the others, using the rental income to pay your mortgage and eventually qualify for a better property.
For more information about the home buyer class or about real estate in the Puget Sound area, get in touch with Pickett Street today at info@pickettstreet.com ((425) 502-5397).