Home Buying 101 – Things You Need to Know
Many people go through a big part of their lives without buying something as large as a car or a home. They may not feel the need to own something new and simply rent a home or apartment and own a used car for years.
However, life changes. Marriages, children, or new jobs may make owning a new home more attractive, or more sensible. A relocation could also create the desire for a new home, or there might be a time when homeownership and the freedom to decorate, change, upgrade, or personalize may become more important.
Many first time home buyers feel a little anxiety when approaching the home buying process. After all, there are a lot of moving parts. Choosing a location, selecting a home, financing the purchase, and going through the building process can seem like an overwhelming set of tasks.
In this week’s blog, we are going to discuss two of the biggest considerations new home buyers need to keep in mind, and how being a little better informed can help them overcome obstacles even when it might seem like a new home is out of reach.
Read on to learn helpful tips you can use to buy your new home.
1. You don’t need to have a 20% down payment to buy a new home. Traditionally, a 20% down payment has always been thought of as the necessary down payment to purchase a home. However, there are other ways. Although 20% down creates a lower mortgage payment, many people choose to put down less and choose to pay for Personal Mortgage Insurance instead.
Personal Mortgage Insurance generally costs between .3% and 1.2% of the amount borrowed to purchase the home. PMI gives lenders the assurance that they will not face a loss in the event of a default on the loan.
PMI can also be a valuable tool for buyers who have less than 20% to put down on a home. In the examples below, the numbers are estimated at the time of the article and may change. However, these are good examples of how PMI can help buyers afford a home even when they have less than 20% to put down.
For buyers putting just 3% down on the purchase of a median Midwest home priced at $185,000, the cost of Personal Mortgage Insurance at the average of .55% only adds about $85 to their monthly payment.
In other words, buyers who can purchase Personal Mortgage Insurance can put can choose to put down far less than 20% on their new home. Buyers can put 10%, 5%, or even 3% down instead and add a small amount to their monthly payment.
2. We cover your construction loan. At Eastbrook Homes, we know it can be challenging to face all of the steps necessary to buy a new home. We also know that many steps in the process slow things down, potentially making the process take much longer than it should.
However, to help make the building and buying process easier, and to help prevent delays that put unnecessary stress on our buyers, Eastbrook Homes has designed our very own building process to make or customer’s experience easier and fun, and to make our job easier too. As part of our Building Process, Eastbrook Homes will cover the cost of your construction loan.
Instead of needing a loan before you get a loan, Eastbrook removes that extra challenge by covering the cost of your new home construction until your mortgage takes over.
This helps us keep your building process moving along without delays and extra stress. Simply get a pre-approval from one of our Lending Partners and Eastbrook will carry the costs of your construction loan so you can focus on building your home.
There are some other considerations to keep in mind when preparing to purchase a new home, but these are some of the biggest sources of stress for new buyers. With a little research, many people will find it is possible to buy or build a bigger home than they thought possible. And, buy or build it in a location where they really want to live.
If you are ready to buy or build your dream home or would just like to begin the conversation, please reach out to the team at Eastbrook Homes and let us help you find the best path forward. Whether you have a down payment of 5% or 50%, we’ll help you get this done.
At Eastbrook Homes, we always give you more home for your money. Call today and let us show you how.
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