Buying a home can be a daunting experience… exciting and nerve-wracking all at the same time, especially for first time home buyers. It’s the biggest purchase of your life! Why wouldn’t it be a mix of emotions?
There are lots of things to consider before you buy...
What is your price range?
What are your long term goals?
Do you want to buy a property as an investment and upgrade later?
Are you planning on having kids and will you need more space later?
Is it the right neighborhood? What home best suits your needs?
You don’t want to have buyer’s remorse after its all done. That’s why finding the home that fits both your needs and wants is so important. And having the right real estate agent who understands your concerns can help make the process flow much easier.
I know I’ve talked before about the low inventory of rentals in Granite County, but I want to talk about it again and offer some advice to anyone looking to buy a home in the coming months.
I get on average 2-3 calls a week from people looking for places to rent in the Philipsburg, Hall and Drummond areas and I hear the same thing from other realtors in the area. Rentals are slim and if something opens up, it’s snatched up quickly.
My point is that buying may be a better option for you if you are in a position to do so. Make those monthly payments for yourself and your independence and not to a landlord. A lot of times you can get a mortgage payment as low as what you are or would be paying for rent. And you have an investment!
When considering a home you will want to look at factors such as how much you can afford for a monthly payment, how much of a down payment you can put down (you may not need one and I will discuss that further), taxes, insurance, closing costs and maintenance if any is needed.
Before you start shopping for your home sweet home, it’s important to talk to a lender and find out how much you qualify for. Having a pre-approval letter from your lender available for your realtor when looking at homes is a huge help. You may think you can afford a $250k- $300k home when a lender only approves you for $150 - $200k.This will lead to disappointment later, so it’s best to know what price you qualify for and go from there. Factors that determine how much you qualify for are how much debt you have, your monthly income and how long you’ve been at your current job.
First time home buyers have a wide variety of options to help them get into a home, including
federally-backed loans and loans for home buyers who don’t have the standard 20% minimum down payment. Two that I recommend are FHA (Federal Housing Administration) and RD (Rural Development) USDA loans.
Montana is a state with mostly rural communities, so check with your lender. RD is most likely offered in your area.
RD loans are intended mainly for those living in defined rural areas and are for low-income borrowers. They can be guaranteed often times by a government agency which will purchase the debt from the lending financial institution and take on the responsibility of the loan if the buyer defaults. You do not need a down payment for RD loans, meaning 100% financing so take advantage of it! Philipsburg, Drummond and Hall all qualify!!
There are no geographic area restrictions for FHA loans which are insured, not guaranteed. This means that the borrowers with FHA loans pay for mortgage insurance, which protects the lender from the loss if the borrower defaults on the loan. FHA income and credit qualifications standards can be slightly higher than for RD. There is a minimum of 3.5% down payment required on these loans and the interest rate is generally much lower than conventional loan programs.
When you reach the point where you are ready to begin shopping choose a good realtor! A knowledgeable realtor will help you find the right home that fits your needs and wants. One who is an expert in your area, who can answer all your questions and concerns.
Your real estate agent is your advocate and will assist you through the entire buying process, start to finish - making an offer and negotiating the purchase price, communicating between parties involved in the transaction and keeping you aware of each step and help to iron out any glitches. If you haven’t talked to a lender yet, your agent can get you in touch with a reputable lender. A good real estate agent can protect you from any unexpected snares you might encounter during the process.
If you’re ready to start shopping or if you have any questions about the buying process call me today at 406-240-5860. I’m happy to help and look forward to hearing from you!