Owning your own home is the key to building wealth in the U.S.A. Why? 2 reasons:
- Appreciation — Over time, real estate increases in value
- Tax Benefits — Federal and State Tax deductions of mortgage interest and property taxes
If you would like to purchase your 1st home, and you are starting from ground zero, commit to a 2-year plan to accomplish your goal.
- Establish Stable Employment
- Pay Your Bills on Time Every Month
- Clean Up Your Credit
- Save for Down Payment
- Look for First Time Homebuyer Programs in Your County and/or State
- Consider Foreclosures
- Find a Good Real Estate Agent
One of the critical evaluation factors for mortgage lenders is the borrower’s type and length of employment. The lender wants to know who your work for, what type of work you do, and how long you have been employed. Try your best to have the same employer for the past 2 years!
Pay Bills on Time
Your credit score is largely based on paying your bills on time every single month! Order a copy of your credit report to make sure it accurately reflects your bill paying history.
Clean Up Credit
The 3 major credit bureaus are TransUnion, Experian, and Equifax. Contact them to request a copy of your credit report. Your state may require that you receive one free credit report per year, so check with your State’s Attorney General. Review your credit report to make sure it is accurate. If you find mistakes, follow the procedures listed by the credit bureau to correct the mistakes.
Save for Down Payment
Saving for a down payment is probably the most difficult goal to achieve. To find the money, look at how you spend your money on a daily basis. If you spend $3 buying coffee every day, buy a Mr. Coffee BVMC-EVX23 12-Cup Programmable Coffeemaker, Black and make your coffee at home. Carry it in a Thermos Stainless King 40 Ounce Beverage Bottle, Midnight Blue if you like to drink coffee during the day while you are at work. If you spend $10 buying lunch every day, make your lunch at home and take it with you to work. Use leftovers from dinner to make a lunch. For instance, if you have chicken for dinner, save one-third of your chicken meal for lunch. Add rice, beans and seasonings to the chicken, and you have a lunch! These 2 simple tips save $65 per week. Over a 2 year period of time, you save $6,760 for your down payment!
Look for Homebuyer Programs
Most states and counties have special programs for first-time homebuyers. Don’t think of this as a handout or welfare. Your tax dollars fund these programs. You may as well receive the benefits! Go to your state’s or county’s website and perform a search on “first time home” or “first time homebuyer.” For a list of state-by-state homebuyer programs, click here. The program may help you pay closing costs or provide matching funds for your down payment. Be aggressive when looking for homebuyer programs!
The word “foreclosure” probably conjures up negative images, however foreclosure properties provide an opportunity to buy a home at below market prices. When the Federal Government (HUD, Fannie Mae, VA) lists foreclosures for sale, first time homebuyers get first dibs! To learn more about purchasing foreclosures, click here.
Find Real Estate Agent
To find a good real estate agent, get recommendations from friends, relatives, and colleagues whose opinions you respect. Go to Open Houses in the neighborhoods you like, and meet the agents holding the Open House. That’s how we met our Real Estate Agent.
To learn more about buying real estate, click here. Beginner real estate investors can follow us on social media:
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The opinions expressed herein are solely those of the Author/WebMaster. Before taking any action, please consult your real estate, financial, and legal advisors.