First-Time Homebuyers Archives

• Introduction: Everything You Need To Know About Empowered DPA Program • Roots of the Empowered DPA program • How does the EPM Empowered DPA Program Work? • Empowered DPA Qualification Guidelines • Requirement of the Program • Exactly How To Apply for the Empowered DPA Program • Conclusion

Ever felt like owning your dream home is just out of reach because of that scary down payment? Push those doubts aside! Enter the game-changing Empowered DPA program—a beacon of hope for many like you. You might wonder, what is this Empowered DPA program all about? Think of it as your financial lifeline in the vast sea of home buying, specifically designed to make that hefty down payment feel less overwhelming. It’s not a magic wand, but it sure feels magical—it’s Down Payment Assistance (DPA), a program designed to make your journey to homeownership simpler, and more attainable.

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Everything You Need To Know About Empowered DPA Program

Roots of the Empowered Down Payment Assistance Program

The Empowered DPA program is a beacon of hope for many aspiring homeowners facing the common challenge of the initial down payment. Recognizing the barriers to homeownership for many, especially in today’s economic climate, the program offers tangible assistance. Homeownership should be attainable for everyone, regardless of their financial standing, the Empowered DPA program is a nationwide initiative. Although, unfortunately, Washington State residents are currently excluded.

How Does the EPM Empowered DPA Program Work?

Navigating the complexities of mortgages and down payments can be scary. Here’s where the Empowered DPA program steps in. For those who find their ideal home but are deterred by the hefty down payment, the program provides up to 3.5% of the home’s cost. This is not a loan to be repaid but a grant, requiring only that beneficiaries stay in the home for a minimum of six months. In essence, it’s a helping hand to make homeownership easy.

All you have to do is apply for the FHA Loan with a qualified lender and they take care of the rest! Start that process HERE.

How is Empowered Down Payment Assistance different from other First-Time Homebuyer Grants

In the vast options of Down Payment Assistance (DPA) programs, the Empowered DPA program shines uniquely, offering a blend of benefits tailor-made to address the pressing needs of today’s home buyers. Here’s a deeper dive into what sets this program apart from its counterparts:

Short Forgiveness Period: A standout feature of the Empowered DPA program is its relatively brief forgiveness period. While many programs might require homeowners to stay in their homes for several years before the assistance is forgiven, the Empowered DPA is forgivable after just six months. This flexibility is a testament to its commitment to genuinely aiding homeowners without tying them down to lengthy obligations.
Flexible Eligibility Criteria: The Empowered DPA program stands out by offering a compassionate and accommodating approach to eligibility. Rather than navigating a maze of requirements, applicants only need to meet one of several criteria to qualify. This inclusivity ensures that a broader range of individuals can access the assistance they need to secure their dream homes.

3. Broad Geographical Reach: Expanding its embrace, the Empowered DPA program is accessible to a vast number of homebuyers across different regions. While some programs are state or region-specific, this program has a nearly nationwide reach, with only a few exceptions.

See the map for area eligibility.

Graphic - Empowered down payment assistance program map for home buyers.

In a world where homeownership often feels like a daunting mountain to climb, the Empowered DPA program throws a much-needed lifeline to those striving to scale those peaks. By keeping its terms flexible and its heart in the right place, it’s clear that this program isn’t just about assisting with finances—it’s about understanding and addressing the real-world challenges faced by homebuyers today.

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Empowered DPA Qualification Guidelines

Just because you haven’t qualified for other first-time homebuyer programs, doesn’t; mean you will not qualify for this one! The Empowered DPA program stands out for its broad reach and accessibility:

Geographical Availability: It’s open to homebuyers all across the nation with the exception of Washington State – a rare breadth for a DPA program.
Eligibility Criteria: To be eligible, you only need to meet one of the following conditions:
- First-Time Homebuyer: You haven’t owned a property in the last three years and will use the new home as your primary residence.
- Occupation: If you are or were (whether as an employee or volunteer) in the military, a first responder, an educator, a medical professional, or a local/federal government worker.
- Income: Your earnings are equal to or less than 140% of the median income in the property’s locale.
- Location: The property you’re eyeing is located in an underserved census tract.
If any of the above scenarios resonate with you, you qualify.

Requirements for the Program

For the Empowered DPA and the associated loan, you must align with these guidelines:

Credit Score: A minimum of 620 is required. If you fall short, consulting your lender could provide insights on improving your score.
Purpose of Loan: Only those looking to purchase a primary residence can apply.
Debt-to-Income Ratio: The maximum ratio stands at 48.99%. This means less than 49% of your gross income should be earmarked for the upcoming housing expenditure combined with other debts like credit card bills, auto loans, and student loans. While this is less than the standard FHA DTI cap of 56.9%, it’s higher than many conventional loans.
Type of Property: This covers single-family homes, duplexes, both single- and multi-wide manufactured homes, FHA-endorsed condos, and PUDs.
Educative Requirement: A homeownership course, approved by Framework Homeownership or a HUD-accredited counselor, must be completed by borrowers.

Exactly How To Apply for the Empowered Down Payment Assistance Program

Embarking on the Empowered DPA application journey is more straightforward than it might seem. Start by completing the Buyer Power Approval and our Savvy Mortgage Partners will confirm your eligibility for the program. They will also pull any other DPA or Grants you may be eligible for. As with any significant financial transaction, documentation is key. Applicants should be prepared with pay stubs, tax documents, and proof of assets. Ensuring a thorough home inspection will round out the process, setting you on a direct path to homeownership.

The path to homeownership, with all its twists and turns, can often feel insurmountable. However, with resources like the Empowered DPA program, those hurdles can be significantly reduced. By offering tangible solutions and clear guidance, the program reinforces the belief that homeownership can be within reach for many. As you consider your next steps, remember that tools and support are available to guide you through your homeownership journey.

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Posted on September 26, 2023 by Lauren Taylor

Down Payment, First-Time Homebuyers, Home Financing, Homebuying Tips, Loan Options, Mortgage Programs

down payment, Home Financing, Home Loan, Homebuying Tips

Most buyers underestimate the costs of buying a home. It’s important to consider all the costs involved beyond the purchase price. While many first-time home buyers diligently save for the down payment, there are several hidden costs that can catch them off guard. In this blog post, we’ll shed light on nine often overlooked costs when buying a home. By being aware of these hidden expenses, you can better prepare your budget and ensure a smooth transition into homeownership.

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Property Taxes

Property taxes can significantly impact your monthly payment. Taxes when it comes to properties are assessed at the local and state level. Before buying familiarize yourself with the state’s property tax rate. Then research the property tax rates in the specific counties or zip codes of your home search. Your Savvy Mortgage Expert will need these details to give you an accurate idea of how taxes will impact your monthly payment.

Homebuyer review home documents and inspection report revealing potential hidden costs in home purchase

Homeowners Association (HOA) Fees

If you’re thinking about a home in a community with an HOA, be prepared for monthly or annual fees. These fees cover amenities, maintenance, and communal services. Review the HOA documents to understand the fee structure and any potential increases in the future.

Private Mortgage Insurance (PMI)

If your down payment is less than 20% of the home’s purchase price, your lender may require you to pay PMI. This additional cost protects the lender in case of default. It’s important to factor in this expense when calculating your monthly mortgage payments.

Home Inspection Costs

While a home inspection is a crucial step in the buying process, it comes with a cost. Hiring a professional inspector can range from a few hundred to a few thousand dollars, depending on the size and complexity of the property. Remember, investing in a thorough inspection can save you from expensive surprises later on. Home inspections are the best way to uncover problems with the house that would otherwise be unknown to the buyer. Do not scrimp at this cost. It will protect you from future expenses.

Closing Costs

Both buyers and sellers have closing costs when buying a home. While the seller’s closing costs are typically paid out of the proceeds from the sale of the home. Buyers have 4 ways to pay theirs. One, they can pay cash out of pocket. Two, negotiating a seller credit into their home purchase contract to have seller proceeds pay a portion of their closing costs. Three, secure a lender credit, which sometimes increases the mortgage interest rate. Four, downpayment assistance programs often allow funds to be applied to buyer closing costs.

Buyer closing costs encompass various fees, including appraisal fees, title search fees, attorney fees, and more.

These costs typically range from 2% to 5% of the home’s purchase price. Before closing, request a breakdown of the anticipated closing costs from your lender or real estate agent to avoid any surprises.

Table comparing the closing costs for buyers and seller when buying and selling a home.

Home Insurance

Homeowners insurance is a necessity to protect your investment. Premiums can vary based on factors such as the home’s location, value, and coverage you choose. Research insurance providers and obtain quotes to estimate the ongoing cost of insuring your new home.

Moving Expenses

Don’t overlook the expenses associated with moving. Whether hiring professional movers or renting a moving truck, these costs can add up quickly. Factor in packing supplies, transportation, and any storage fees if needed.

House Hold Appliances

Household appliances, like water heaters, dryers, and refrigerators, have finite lifespans due to wear and tear over time. Regular replacement is essential not only to maintain their efficiency but also to ensure safety. Neglecting the replacement of aging appliances could lead to reduced performance, increased energy consumption, and potential safety hazards, underlining the importance of staying mindful of their natural life spans.

Infographic on how long home appliances last. Showing the appliance, average life span and average cost to replace. Shows hidden costs most buyers don't think about when buying a home.

Maintenance and Repairs

Owning a home means taking care of ongoing maintenance and repairs. From routine maintenance tasks to unexpected repairs, allocate a portion of your budget for these expenses. Having a contingency fund will help you handle these costs without financial strain. Check out our Homeowner’s Guide for more home maintenance tips.

Utilities and Home Services

When moving into a new home, remember to account for utility costs such as electricity, water, gas, and internet. Additionally, consider expenses related to home services like pest control, landscaping, and garbage removal.

As a first-time homebuyer, being aware of these hidden costs is crucial for planning and budgeting effectively. By considering expenses beyond the purchase price, such as property taxes, HOA fees, and home maintenance, you can make informed financial decisions and avoid unwelcome surprises. Remember, careful planning and due diligence will help you navigate the home buying process with confidence and enjoy the benefits of homeownership for years to come.

Review your financial situation with a savvy mortgage expert

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Posted on August 17, 2023 by Lauren Taylor

Financial Literacy, First-Time Homebuyers, Homebuying Tips

closing costs, First-Time Homebuyers, Homebuying Tips, mortgage insurance, property taxes

If you’re considering buying a home, the term “conventional loan” might have caught your attention. But what exactly is it, and how does it work? First, we’ll explore the eligibility requirements, and upfront costs including down payment and closing costs then we will explore interest rates, monthly mortgage payments, and the impact of mortgage insurance on conventional loans. By understanding these factors, you can determine if a conventional loan is the right fit for you.

Eligibility Requirements for a Conventional Loan

There are four reasons the conventional home loan maybe be the right choice for you.

To start, with a down payment as low as 3%, it’s an attractive option for first-time home buyers. Second, if you’re a non-first-time buyer or have a median income of ≤80%, a 5% down payment requirement is still reasonable. Third, conventional loans offer the flexibility to purchase multi-unit properties with a 15% down payment or second homes with at least a 10% down payment. Lastly, the option of an adjustable-rate mortgage with a minimum down payment of 5% provides added versatility. Consider these factors to see if a conventional home loan aligns with your goals of homeownership.

Understanding Conventional Loans

Gaining a better understanding of conventional home loans can help to create a stress-free and easy homebuying experience. By empowering you with knowledge about eligibility, down payment options, and the overall process, you can buy a home with confidence.

Versatility in Property Types

One advantage of conventional loans is their versatility in purchasing various property types. Whether you’re looking for a primary residence, a second home, or an investment property, conventional loans can be used for single-family homes, multi-unit properties, and condominiums.

Types of Conventional Loans

There are two types of conventional loans: conforming and non-conforming. Conforming loans adhere to guidelines set by Fannie Mae and Freddie Mac, offering lower interest rates and better terms. Non-conforming loans do not meet these guidelines and are usually provided by private lenders.

How Conventional Loans Work

When you apply for a conventional loan, lenders assess your creditworthiness by evaluating factors such as credit history, income, employment, and more. If approved, you’ll receive an interest rate and loan terms, including the duration and monthly payment.

Cost of A Conventional Loan

There are a number of costs to consider when looking at the affordability of a conventional home loan. These costs can be broken down into two main categories: upfront costs and monthly mortgage payments.

Upfront Costs of Conventional Loan

The upfront costs of the conventional loan include downpayment and closing costs. If able the buyer can elect to pay the PMI (private mortgage insurance) upfront or negotiate a seller credit to cover the cost.

Down Payment

When it comes to down payment it will be largely based on if you are a first-time homebuyer and what type of property you are looking to buy. Below is a breakdown of the upfront down payment requirement for each type of property when using the conventional loan.

Property Type	Down Payment Requirement
First-time Homebuyer	3%
Non-first-time buyers or ≤80% median income	5%
Multi-unit property	15%
Second home	10%
Adjustable-rate mortgage	5%

Closing Costs

Closing costs include fees such as loan origination, appraisal, credit report, title search, title insurance, and attorney services. While the specific amount can vary based on factors such as the loan amount, property location, and lender, a general rule of thumb is to budget around 2% to 5% of the home’s purchase price for closing costs.

When it comes to closing costs it’s important for you to carefully review the Loan Estimate provided by the lender, which outlines the estimated closing costs. Prepare that unless your agent negotiates a credit with the seller you will need to pay these closing costs at the time you wire your down payment.

Private Mortgage Insurance

If your down payment is less than 20%, your mortgage lender will require private mortgage insurance. PMI protects the lender in case of default and adds an additional monthly fee for the homeowner. However, once your loan balance reaches 80% of the home’s value, you can request PMI removal.

Some buyers pay their PMI as an upfront fee included in their closing costs, but usually, it is paid as part of your monthly mortgage payment. While other buyers pay it in the form of a slightly higher interest rate. All in all, choosing how to pay for PMI is a matter of running the numbers to figure out which option is best for you.

Monthly Mortgage Payment of Conventional Loan

Your monthly mortgage payment is based on the amount of cost (down payment closing, and PMI) you pay upfront, the purchase price of the home you are buying, and the mortgage interest rate you qualify for.

What are the interest rates for conventional mortgages?

Interest rates for conventional loans change daily. Rates are usually a bit lower than FHA loan interest rates and slightly higher than VA loan interest rates. It is important to know that the actual interest rate you get will be based on your personal situation.

While many sites can give you estimated interest rates, the best way to see your actual interest rate for a mortgage is to apply. When you apply with our Savvy Mortgage Partners, with our Po wer Buyer Approval™, you’ll be able to see your real interest rate and estimated payment without any commitment.

Get Your Power Buying Approval™ Now

Monthly Mortgage

When it comes to your monthly payment it will include both principal and interest. All things considered, you can get an idea of what your monthly mortgage payment will be with our online mortgage calculator. These numbers will change slightly depending on home location and length or loan term.

For a more precise breakdown of your estimated monthly mortgage, you will need to meet with a mortgage expert.

Comparing Conventional Loans to Other Home Loan Types

When considering which loan product is right for you it is important to understand the difference between them in terms. Please note that below is an overview, and there may be additional factors and details to consider. We recommend consulting with a mortgage professional or lender for a comprehensive comparison and personalized advice based on your specific circumstances.

Conventional vs VA Loan

In comparing the conventional loan and VA loan it is easy to see they are very different. Primarily in who is eligible to qualify for the loan. The ability to use the VA Home Loan is tied to an act of military service and conventional eligibility rests solely on financial abilities. Here are some other key factors that set these loan options apart:

	Conventional Loan	Va Loan
Down Payment	Varies (typically 5% or more)	No down payment required
Mortgage Insurance	Required if the down payment is less than 20%	No mortgage insurance required
Eligibility	Open to anyone who meets the requirements	Exclusively available to veterans, active-duty service members, and their surviving spouses
Funding Fee	Not applicable	Required, ranges from 1.25% to 3.3% of the loan amount
Occupancy Requirement	No specific occupancy requirement	Property must be occupied by the borrower

Conventional vs FHA Loan

When comparing conventional loans and FHA loans, one of the most significant differences lies in the eligibility criteria. Key factors between these loans include:

	Conventional Loan	FHA Loan
Down Payment	Varies (typically 3% or more)	As low as 3.5%
Mortgage Insurance	Lower loan limits set by the county	Required, including upfront and annual premiums
Credit Requirements	Typically higher credit score required	More lenient credit score requirements
Property Eligibility	Can be used for a variety of property types	Primarily for owner-occupied single-family homes
Required if the down payment is less than 20%	Higher loan limits available	Typically higher credit scores required

Conventional vs USDA Loan

The most notable disparity between conventional loans and USDA loans, with a primary distinction being the property’s location. While conventional loans offer flexibility for a variety of property types, USDA loans are limited to mostly rural areas.

	Conventional Loan	USDA Loan
Down Payment	Varies (typically 3% or more)	No down payment required
Mortgage Insurance	Required if the down payment is less than 20%	Required, including upfront and annual fees
Property Eligibility	Can be used for a variety of property types	Limited to eligible rural and suburban areas
Income Eligibility	No specific income restrictions	Income limits based on area and household size
Required if the down payment is less than 20%	Can be used for primary residences, second homes, and investment properties	Primarily for primary residences in eligible areas

In conclusion, conventional loans provide competitive interest rates, flexible terms, and a range of options. To determine if it’s the right fit for you, evaluate the eligibility requirements, down payment, and monthly mortgage, and consider the impact of mortgage insurance. By understanding these factors, you can make an informed decision about whether a conventional loan aligns with your homeownership goals.

Ready to explore your home loan options? Complete our Power Buying Approval™ now for personalized guidance on finding the best home loan for your needs.

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Posted on June 23, 2023 by Lauren Taylor

Down Payment, First-Time Homebuyers, Home Financing, Homebuyer Education, Homebuying Tips, Loan Options, Mortgage Loans, Mortgage Process, Mortgage Programs

conventional loan, down payment, First-Time Homebuyer, mortgage calculator, Mortgage Financing, mortgage insurance, mortgage loan

Buying a home for the first time is an exciting milestone, but it can also be a complex and scary process. To ensure a successful home buying journey, it’s crucial to be aware of common mistakes that first-time homebuyers often make. By avoiding these pitfalls, you can save yourself from unnecessary stress, financial setbacks, and potential regret. In this article, we’ll delve into the seven most critical mistakes that first-time homebuyers should steer clear of. Let’s explore each of these pitfalls and learn how to buy your first home with confidence.

Mistake #1: Not Having a Realistic Budget

A common oversight among first-time homebuyers is failing to establish a realistic budget. Without a clear understanding of your financial abilities, you may find yourself in over your head. To avoid this mistake, carefully evaluate your income, expenses, and debt to determine a comfortable monthly payment that you can afford.

Find out how much home you can really afford with our quick Buying Power Approv al™.

Mistake #2: Not Correcting Credit Report Issues

Your credit score plays a significant role in getting a favorable mortgage rate. Failing to correct any errors or address negative marks on your credit report can result in higher interest rates or even loan denial. Take the time to review your credit report and address any issues to ensure the best possible loan terms.

Mistake #3: Not Comparing Mortgages Options

As a first-time homebuyer, choosing the right home loan is crucial to your long-term financial stability. Many first-time homebuyers make the mistake is not understanding the differences in the home financing options to advocate for themselves. Take the time to learn about the pros and cons of the different lending options.

“When we bought our first home our realtor was also the listing agent for the seller. We were encouraged strongly to use their preferred lending partner who admitament that the FHA Loan was a better option for us (over our VA Loan). Now looking back I realize that the seller wanted us to use the FHA Loan, but it cost us more and we had a higher interest rate. Ultimately we ending up refinancing into a VA Loan monthly later. I wish I had known more about the different type of loan prior to buying our first home. It would have saved us a lot of time, money and stress.”
lauren taylor, co-found savvyhomebuyer.com

Between the FHA loan, USDA home loan and VA loan each has pros and cons. Ask your Savvy Mortgage Expert to 1) identify which home loans you qualify for and 2) create a comparison chart to help you see the cost difference and interest rates available with each loan product. This should give you a clear understanding of what the right mortgage product is for you and why.

Mistake #4: Leading with Emotions

It’s easy to get caught up in the excitement of finding your dream home, but making emotional decisions can lead to regret. Avoid the mistake of overlooking crucial factors such as location, property condition, and future resale potential. Remain level-headed and consider all practical aspects to ensure a wise investment.

Mistake #5: Making Big Financial Decisions During the Home Buying Process

It’s crucial for a first-time homebuyer to avoid making significant financial decisions, such as large purchases or applying for credit. These actions can impact your creditworthiness and hurt your current debt-to-income ratio. Ultimately adding to debt or making a big purchase in the middle of your transaction could jeopardize your ability to buy the home. Your goal should be to maintain financial stability until after the closing process is complete.

Mistake #6: First-Time Homebuyers Should Never Waive the Home Inspection

Opting to skip a home inspection to expedite the process or appease the seller, is a grave error. As a first-time homebuyer it is difficult to know the problems to look for when buying a home. A professional home inspection provides crucial insights into a property’s condition, potential repairs, and safety concerns. Even in competitive real estate markets, we do not recommend buying a home without verifying its condition first. This first-time homebuyer mistake could financially ruin you if the property ends up having hidden issues.

Mistake #7: Underestimating the Costs of Owning a Home

First-time homebuyers often underestimate the financial responsibilities that come with homeownership. Beyond the mortgage payment, there are additional costs like property taxes, insurance, maintenance, and repairs. It’s essential to budget for these expenses to ensure you can comfortably handle the additional financial needs of owning a home.

In conclusion, mistakes will make or break your first-time homebuying experience. The journey of becoming a first-time homebuyer can be filled with excitement and anticipation. However, it’s important to navigate this path with caution and avoid common mistakes that can have long-lasting consequences. By learning from the experiences of others, such as not having a realistic budget, neglecting credit report issues, or underestimating the costs of homeownership, you can set yourself up for a successful and fulfilling homeownership experience. Remember, being a Savvy Homebuyer is all about arming yourself with knowledge, seeking professional advice, and making informed decisions!

This will empower you to make the right choices and embark on this new chapter of homeownership with confidence. Happy homebuying!

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Posted on June 21, 2023 by Lauren Taylor

Down Payment, Financial Literacy, First-Time Homebuyers, Home Financing, Homebuying Process, Homebuying Tips, Homeownership Tips

First-Time Homebuyers, Home Financing, Home Loan, Homebuying Tips, Mortgage Loans

If you are considering buying your first home but struggling to qualify for a traditional mortgage then an FHA loan may be the perfect solution for you. Understanding the benefits and drawbacks of an FHA loan can help you finally achieve your homeownership goals. Here is what every first-time homebuyer needs to know about getting an FHA loan.

check your fha elgibility

Why FHA Loans are Great for First-Time Homebuyers

FHA loans are mortgages insured by the Federal Housing Administration. These loans offer down payment options as low as 3.5% for credit scores of 580 and above. However, borrowers should be aware of the mortgage insurance premiums required to protect lenders in case of default.

Who is considered a first-time homebuyer?

The FHA considers a first-time home buyer as someone who:

Has not held ownership of a home in the US during the last 3 years.

Whose name has not appeared on the title of a property in the last 3 years.

It is important to note, that an individual who has been listed on a mortgage in the last 3 years is not disqualified from FHA eligibility. So long as the person’s name did not appear on the title of the home.

FHA Loan Requirements

The FHA home loan has specific requirements that borrowers must meet. These include a minimum credit score, typically around 580, although some lenders may accept lower scores. Additionally, borrowers must demonstrate a stable employment history and sufficient income to repay the loan.

The FHA also sets limits on the amount borrowers can borrow based on their location.

FHA Home Loan Minimum Eligibility Requirements. Savvy Homebuyer graphic on the credit score, down payment, debt to income ratio needed for a first-time home buyer FHA Loan.

get pre-approved for the fha home loan

Furthermore, applicants must undergo a thorough appraisal process to ensure the property meets certain standards and is suitable for financing. Understanding and meeting these requirements is crucial for individuals considering an FHA home loan.

Benefits of the FHA Loan

Requires a low down payment

With rising home costs one of the most difficult obstacles for first-time buyers is saving a down payment. While conventional financing options can require a substantial amount the FHA Loan requires a minimum of 3.5% of the home’s purchase price.

Flexible credit score standards

Additionally, the FHA loan has more lenient credit requirements compared to other mortgage options. To be eligible for the 3.5% down payment option a homebuyer must have a credit score of 580 or greater. On another note, if a homebuyer’s credit is below 570 at the time of close, the FHA will require a 10% down payment.

Pros and Cons graphic for the FHA Home Loan for first time homebuyers.

Competitive Interest Rates

Most importantly, FHA loans can often offer lower interest rates, allowing you to save thousands over the life of your mortgage. Lenders finance these loans based on the security of the FHA insurance, which lowers their risk, allowing them to offer more competitive rates.

Drawbacks of FHA Loans

While there are numerous benefits, it’s important to consider the potential drawbacks. Understanding these limitations can help you make informed decisions about which mortgage is right for you.

Mortgage Insurance Premiums

One of the most significant pitfalls of an FHA loan is the mortgage insurance premium (MIP), which is a requirement for all FHA loans. The FHA Mortgage Insurance Premium (MIP), is the FHA’s version of PMI. It is an additional the borrower pays to protect the lender from losses in the event the loan defaults. It is important to note that there is an upfront insurance premium of 1.75% of the loan amount at closing, and then a monthly premium for the life of the loan.

Get a monthly mortgage estimate here and find out how much MIP will impact your monthly mortgage payment.

FHA Loan Limits

The FHA sets loan limits based on the county, and the limits are usually lower than those of other mortgage products. This means you may not be able to buy the home you want if it exceeds the FHA’s loan limits, and you may need to go for conventional financing options instead. Search your desired zip code here for the loan limit in your area.

Home Requirements for FHA Loans

Not only does the buyer have to qualify for the financing, but the home also must meet certain value and condition requirements. Including:

An appraisal must be completed on the home. The FHA-approved appraisal report must confirm that the value of the home is at least the agreed purchase price.
The home must be a primary residence.
The home buyer must take possession of the home and occupy the property within 60 days of closing.
The home must meet minimum condition standards.

If you are struggling to save a down payment and have less-than-ideal credit, the FHA loan could be the answer to making your homeownership dreams a reality. Take a moment to complete our Weigh the benefits and drawbacks and do your research so you can make an informed decision.

Commonly Asked Questions About First-Time Home Buyer Information on The FHA Home Loan

FHA vs Convention Home Loan

The FHA loan, backed by the Federal Housing Administration, typically requires a lower down payment and has more lenient credit requirements, but comes with mandatory mortgage insurance premiums. In contrast, conventional loans, not insured by the federal government, often have higher credit score requirements and larger down payments, but they offer more flexibility in terms of loan terms and the potential to eliminate private mortgage insurance once a certain equity threshold is reached.

Comparing the FHA home loan to the conventional home loan for first time home buyers.

Home Buying Process with The FHA Home Loan

The FHA home loan process begins with a potential buyer getting pre-approved by an FHA-approved lender, ensuring they meet specific income, credit, and down payment requirements. Once pre-approved, the buyer can confidently shop for homes within their budget, knowing the FHA will back their mortgage. After selecting a property, the buyer proceeds with the loan application, and property appraisal, and finally closes the deal, benefiting from the FHA’s lower down payment and more lenient credit criteria.

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Posted on June 19, 2023 by Lauren Taylor

Down Payment, Financial Education, Financial Literacy, First-Time Homebuyers, Home Financing, Homebuyer Education, Homebuying Process, Homebuying Tips, Loan Options, Mortgage Loans, Mortgage Programs

fha loan, homebuyer tips, mortgage loan

Ultimate Guide To Buying A Home in Panama City

Are you considering purchasing a home in Panama City, Florida? This vibrant city has become a popular destination for both tourists and permanent residents alike. With its beautiful beaches, friendly community, and affordable cost of living, it’s no wonder why so many people have chosen to call this place home. In this ultimate guide, we will walk you through step by step what it takes to buy a home in Panama City.

unlock your home buying power!

Understanding the Panama City Real Estate Market

Before you begin your home search, it’s important to understand the real estate market in Panama City. The housing market here is thriving, with homes selling quickly and prices steadily rising. The city has a lot to offer, from beautiful beaches to a growing economy and affordable cost of living. Here are a few key factors driving the market:

Panama City at night. The perfect place to buy a first home.

The area’s growing economy: Panama City is home to a diverse economy with a variety of industries, including healthcare, education, and tourism. The city has seen steady job growth in recent years, which has contributed to the thriving real estate market.
The city’s popularity as a tourist destination: Panama City is a popular destination for tourists from all over the world. With its beautiful beaches, warm weather, and vibrant culture, it’s no surprise that many people are choosing to invest in property here.
The affordable cost of living compared to other coastal cities: While Panama City is a popular tourist destination, it’s also an affordable place to live. The cost of living is lower than in many other coastal cities, making it an attractive option for those looking to buy property.

Popular Neighborhoods and Areas

As you begin your search, you’ll want to explore different neighborhoods and areas of Panama City to find the perfect fit for you and your family. Some popular neighborhoods to consider include:

Historic St. Andrews: This neighborhood is known for its charming historic homes and tree-lined streets. It’s a great option for those who want to be close to downtown Panama City.
Cove: This waterfront neighborhood is located on the east side of Panama City and is known for its beautiful views and quiet streets.
Downtown Panama City: If you want to be in the heart of the action, downtown Panama City is the place to be. You’ll be close to shops, restaurants, and entertainment options.
Bayou George: This rural community is located just north of Panama City and is known for its peaceful, country setting.
The Beaches: Panama City Beach is a popular destination for tourists and locals alike. With its beautiful white sand beaches and crystal-clear water, it’s no wonder why so many people choose to buy property here.

Market Trends and Predictions

The market in Panama City is currently a seller’s market, with homes selling quickly and for a higher price than in recent years. This trend is predicted to continue into the future. However, with the ongoing COVID-19 pandemic, it’s uncertain how the market will be affected in the long term. It’s important to work with a knowledgeable real estate agent who can help you navigate the market and find the best property for your needs.

The Home Buying Process in Panama City

Now that you have a better understanding of the real estate market, it’s time to dive into the home buying process in Panama City. Here are the steps you’ll need to take:

Mortgage Pre-approval and Financing Options

The first step to buying a home in Panama City, Florida is getting qualified for your home loan. This can be a simple and easy process starting with completing our quick Buyer Power Approval™.

Our team of mortgage experts will review different home loan types with you such as FHA, Conventional, USDA, and VA. They will guide you in understanding all your financing options and help you to choose which is right for you. Our team of experts will also determine if you are eligible for state down payment assistance programs or local home buying grants.

unlock your home buying power!

Finding a Real Estate Agent

Once you have your budget and the area then it is time to pick an agent that is an expert in the area. Curious how to find an agent that best meets your needs? Check out our article on “How to Interview A Real Estate Agent“.

We know better than most that not all agents are equal. This is why we have partnered with top local real estate professionals ready to help our Savvy Homebuyers.

“First-time home buyers in Panama City can look forward to consistent equity as we remain one of the top tourist areas in the country multiple years running, after all, can you really beat the Emerald Coast?”
Panama City Savvy Homebuying Expert

connect me with your local savvy agent!

Searching for Your Dream Home

Once you have your agent and financing in place, it’s time to start looking at homes! Your agent will take the lead on finding homes that work for you and setting up showings for you to tour in person. Take your time and explore different neighborhoods and types of homes. Don’t hesitate to ask your agent questions and voice any concerns you may have.

Making an Offer and Closing the Deal

When you’ve found the perfect home, it’s time to make an offer. Your agent will be able to guide you through this process and negotiate on your behalf. When your offer is accepted, you’ll move on to closing the deal. This involves signing the contract and transferring ownership of the home.

Cost of Living in Panama City

Now that you’ve purchased your home, it’s essential to understand the cost of living in Panama City. Here’s a breakdown of some of the major expenses:

Housing Expenses

Of course, your largest expense will be your mortgage payment. However, property taxes and homeowners insurance should also be factored in. These expenses vary depending on the value of your home.

Utilities and Transportation

Utilities such as electricity, water, and internet are essential expenses to consider. Transportation costs will vary depending on your location and whether you need a car or can rely on public transportation.

Food and Entertainment

Panama City has a variety of dining and entertainment options, with prices ranging from budget-friendly to high-end. It’s important to budget accordingly and choose options that fit within your means.

Healthcare and Education

Panama City has a variety of healthcare options, including hospitals and clinics. If you have school-aged children, make sure to research the education options available to ensure a smooth transition.

Tips for Relocating to Panama City

Relocating to a new city can be both exciting and overwhelming. Here are a few tips to make the transition easier:

Preparing for the Move

Make sure to plan your move well in advance and hire professional movers if necessary. Double-check your lease or purchase agreement and make sure to transfer utilities and other necessary services.

Adjusting to the Climate and Lifestyle

Panama City has a humid subtropical climate, so it’s important to prepare for hot and humid weather. It’s also helpful to get involved in local events and organizations to better acclimate to the community.

Networking and Building a Community

Building a network of friends and acquaintances is essential for feeling at home in any new city. Attend local events, join social clubs, and volunteer to get involved and meet new people.

By following these steps and considering the key factors involved in buying a home in Panama City, you’ll be well on your way to finding and settling into your dream home. Welcome to Panama City, where the sun, sand, and friendly community await!

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Posted on June 18, 2023 by Lauren Taylor

Down Payment, Financial Education, Find A Realtor, First-Time Homebuyers, Homebuyer Education, Homebuying Process, Homebuying Tips, Loan Options, Mortgage Process, Mortgage Programs, Moving and Relocation, Real Estate Agents

First-Time Homebuyers, Home Financing, Home Loan, Homebuying Tips, Mortgage Loans

Buying your first home in Florida can be an exciting but intimidating experience. Florida, with its diverse housing market and emphasis on outdoor living, can be an especially attractive option for first time homebuyers. So whether you are a local who is tired or renting or are considering a cross-country move buying a home in Florida may be the right move for you. Whether you’re drawn to the sandy beaches of Miami or the bustling city streets of Orlando, this guide will help you navigate the home buying process and make your first home purchase a success.

The Florida Real Estate Market

If you’re considering buying a home in Florida, it’s important to understand the factors that shape the state’s real estate market. Florida’s real estate market is influenced by economic expansion, job creation, population growth, and interest rates. Notably, there has been a surge in people moving to Florida from other states, driving up housing demand.

The COVID-19 pandemic has also changed the market, as more individuals prioritize spacious homes with dedicated offices and outdoor spaces. Furthermore, the demand for second homes and holiday homes has seen a notable increase, particularly in warm climate regions offering outdoor recreation options. As a result, Florida’s real estate market is expected to continue to grow in the next 5-10 years.

Florida Homebuying Process

Get your Home Loan Pre-Approval

The first step to buying a home in Florida is getting qualified for your home loan. This can be a simple and easy process starting with completing our quick Buyer Power Approval™.

get approved

Choose an Agent

Once you have your budget and the area then it is time to pick an agent that is an expert in the area. Not all agents are equal which is why we have top local real estate professionals ready to help our Savvy Homebuyers.

Complete this quick questionnaire to be connected with our local expert.

Find A Home

It is important to note that the average homebuyer will tour 13 houses in search of their new home. Your agent will set up showings based on the homes that meet your needs and budget for the area.

Due to limited home inventory, we highly recommend moving quickly if you find a home that interests you.

Write an Offer

The offer sets the terms for the purchase contract. Once you and the seller are in agreement on the price and terms the contract period can start.

Home Inspection

During this time having a professional examine the condition of major property systems like electricity, plumbing, roofing, etc. will save you from buying a money pit.

Home Appraisal

Once the inspection is completed an appraisal is scheduled. The appraiser will confirm the value of the home and make a record for the mortgage lender.

Close and Move into Your First Home

Lastly, you will sign loan documents, wire the down payment and closing costs and close on your first home!

How much home can you afford in Florida cost?

The median home price in Florida is around $300,000, but prices can vary significantly depending on the specific city or region.

Required Down Payment Based on Loan Type

The down payment amount you’ll need depends greatly on the type of mortgage loan you choose. Let’s take a closer look at how much you would need to put down for a $300,000 home with each of the five major loan programs:

Conventional Loan

$9,000 (3.5% down)

A loan that conforms to Fannie Mae and Freddie Mac’s guidelines, including a minimum credit score of 620.

VA Loan

$0 (0% down)

Only available to military service members and veterans who have reached minimum service thresholds. Surviving spouses may also apply.

FHA Loan

$10,500 (3.5% down)

Backed by the Federal Housing Administration. Your credit score may be as low as 580 if you have a 3.5% down payment.

USDA Loan

$0 (0% down)

You need to purchase in a designated rural area and have a low-to-moderate income for the area where you’re buying.

No-PMI Conventional Loan

$60,000 (20% down)

If you want to avoid private mortgage insurance (PMI) you need 20% down. But you may find lenders that allow you to borrow a second mortgage to bridge the gap between your savings and that 20%.

Estimated monthly mortgage on Florida homes

Florida offers affordable home buying options

When buying a home in Florida, several financial advantages come into play. With no state income tax, residents keep more of their earnings, while the lower cost of living makes housing more affordable. Florida offers diverse housing options for different budgets, along with property tax exemptions. Furthermore, Florida has no estate tax, allowing families to preserve wealth. The market occasionally offers foreclosed properties at discounted prices, adding to the financial benefits of buying a home in the Sunshine State.

Florida First-Time Buyers programs

Florida has taken steps to facilitate homeownership for first-time buyers by creating a range of homebuying assistance programs. The Florida Housing Finance Corporation (FHFC) has been instrumental in offering statewide programs such as:

Florida Housing Finance Corporation (FHFC)

Florida First

Florida Assist

Florida HFA Preferred Conventional Loan

Florida HFA Preferred PLUS Conventional Loan

First-time homebuyer programs like these have taken significant steps to keep homeownership within reach for Florida residents.

Additional Homebuyer Programs by County in Florida

In addition, numerous counties and cities in Florida have also rolled out their own programs, offering personal support. For example, programs like the Homeownership Assistance Program in Miami-Dade County, the Homebuyer Purchase Assistance Program in Broward County, and the Down Payment Assistance Program in Orange County help relieve financial burdens and guide first-time buyers through the process.

Popular Florida Cities for First-Time Homebuyers

Florida has many popular cities for first-time homebuyers, each with its unique charm and characteristics. Miami, Orlando, Tampa, and Jacksonville are all favorite destinations for those seeking a new home.

Miami

Miami has beautiful beaches and vibrant nightlife. With a bustling cultural scene and diverse population, it’s a popular choice for young professionals. The city has a thriving arts and entertainment scene, with world-class museums, galleries, and theaters.

Orlando

Orlando, home to Walt Disney World and Universal Studios, is a family-friendly city with affordable housing options. The city is also home to world-renowned theme parks, making it a popular place to visit for families looking for fun and entertainment.

Tampa

Tampa, located along the Gulf of Mexico, is perfect for those who love being outside. The city boasts beautiful beaches, scenic parks, and world-class golfing. Tampa’s downtown area has been undergoing a revitalization in recent years, attracting new businesses and residents to the area.

Panama City

First-time homebuyers are increasingly drawn to Panama City, Florida, due to its unique combination of natural beauty, affordable housing options, and vibrant community. Check out our ultimate guide to buying a home in Panama City.

When you choose a city to buy a home in, it’s important to consider factors such as job opportunities, quality of life, and affordability. Each city has its strengths and appeal, so it’s important to research and visit different cities to find the right fit for you.

Where to Buy a Home on a Budget in Florida

If you’re looking to buy your first home in Florida there are a number of affordable neighborhoods to consider such as Palm Coast-Flagler County, Ocala, and Jacksonville. These areas offer a combination of affordability, amenities, and a desirable quality of life.

Palm Coast-Flagler County

With a variety of neighborhoods, residents can enjoy outdoor activities, including golfing, boating, and exploring nature trails. The area also boasts a strong sense of community and access to amenities such as shopping centers, dining options, and parks.

Ocala

The city is surrounded by picturesque horse farms and rolling hills, offering a tranquil setting. Ocala’s affordable housing options range from single-family homes to equestrian properties, therefore providing a variety of choices for homebuyers. The area also offers a thriving downtown scene with art galleries, local shops, and dining establishments.

Jacksonville

As one of Florida’s largest cities, Jacksonville combines affordability with urban amenities. The city offers a diverse range of neighborhoods, from historic districts to modern suburban communities. With a vibrant arts and culture scene, numerous parks, and miles of beautiful beaches, Jacksonville provides a high quality of life at an affordable cost. The city also offers job opportunities, excellent schools, and a wide array of recreational activities for residents to enjoy.

Why People Are Moving To Florida

In recent years Florida has become a popular place to move to for a number of reasons.

Florida offers a warm climate year-round

One of the primary benefits of moving to Florida is its favorable climate. Known as the Sunshine State, Florida offers a warm and sunny environment for most of the year. The mild winters and long, hot summers make it an ideal destination for those seeking to escape colder climates. The sunshine also promotes an active outdoor lifestyle, allowing residents to enjoy activities like beach outings, water sports, and year-round golfing.

Tax benefits of moving to Florida

Another advantage of living in Florida is its favorable tax environment. The state imposes no personal income tax, which means residents can keep more of their earnings. Additionally, Florida does not tax retirement income, making it an attractive destination for retirees seeking to stretch their savings. The absence of estate tax is another benefit for individuals looking to protect and pass on their wealth. These tax advantages make Florida a great choice for individuals and families looking to maximize their financial resources.

Florida is a Veteran friendly state

Florida is widely recognized as a Veteran-friendly state for several reasons. Its numerous military installations provide job opportunities and a sense of community for Veterans and their families. The state offers tax benefits such as exempting military retirement pay from income tax and giving property tax exemptions for disabled Veterans. Overall, these factors help in making Florida an appealing and supportive destination for those who have served in the armed forces.

In conclusion, armed with these insider tips, you’re well-equipped to navigate the process of buying your first home in Florida. It is important to know that your success and experience as a home buyer will largely be tied to the quality of your homebuying team. Complete your Buyer Powerful Approval™ to start the homebuying process for Florida and you’ll be on your way to securing your dream home in the Sunshine State.

1 Comment

Posted on June 18, 2023 by Lauren Taylor

Down Payment, Financial Literacy, First-Time Homebuyers, Homebuyer Education, Homebuying Process, Homebuying Tips, Homeownership

down payment, First-Time Homebuyers, Home Financing, Home Loan, Homebuying Tips

Are you ready to take control of your credit and pave the way to a brighter financial future? Repairing your credit is a journey that requires commitment, consistency, and a clear plan of action. While it may seem like a daunting task, rest assured that with the right credit repair tips and a positive mindset, you can turn things around and improve your creditworthiness.

Credit Is An Important Part of Your Home Buying Power

When determining how much home a buyer can afford mortgage lenders consider several crucial factors. Including buyers’ income, debt, down payment credit history, and credit score.

Boosting your credit score can massively improve your buying power. A higher credit score not only improves your chances of home loan approval but can also qualify you for a lower rate.

Unlock your home buying power in 60 seconds or less with our Buyer Power A nalysis™

Review Credit Reports: The Key to Identifying Opportunities

Your credit reports serve as a window into your creditworthiness. They provide a detailed record of your credit history and financial behavior. By reviewing your credit reports from the major credit bureaus—Equifax, Experian, and TransUnion—you gain valuable insights into potential areas of improvement.

Take advantage of your right to a free annual credit report from each bureau at annualcreditreport.com. Look for errors, inaccuracies, or outdated information that might be dragging your credit score down. Dispute any discrepancies you find by filing a dispute with the relevant credit bureau(s). Provide supporting documents or evidence to strengthen your case, and let the credit bureau(s) investigate and correct the errors if necessary.

Dispute Errors: Correcting Inaccuracies to Enhance Your Credit Profile

Mistakes happen, even on credit reports. Unfortunately, these errors can have a negative impact on your creditworthiness. That’s why disputing errors is a crucial step in your credit repair journey. By addressing and rectifying inaccuracies, you can effectively boost your credit profile.

When you spot errors on your credit reports, don’t panic. Stay optimistic and proactive. File a dispute with the credit bureau(s) responsible for the mistake, and clearly explain the issue. Include any relevant documentation or evidence that supports your case. Next, the credit bureau(s) will investigate your dispute and make corrections as needed. Remember, the removal of even a single negative item can significantly improve your credit score.

Pay Bills on Time: Building a Foundation of Responsible Financial Habits

Punctuality is the name of the game when it comes to repairing your credit. Consistently paying your bills on time showcases your reliability and commitment to meeting your financial obligations. This responsible financial behavior is highly regarded by creditors and can help you rebuild your creditworthiness.

Make it a monthly habit to prioritize timely bill payments. Set reminders, create a budget, or automate payments to ensure you never miss a due date. Whether it’s credit card bills, loan repayments, or utility bills, allocate the necessary funds and submit your payments promptly. By doing so, you’ll avoid late fees, penalties, and most importantly, the negative impact on your credit score.

Reduce Credit Utilization: Unlocking the Power of Low Balances

The way you manage your credit cards can significantly influence your credit repair journey. One key factor to consider is your credit utilization ratio—the percentage of available credit you’re using. A high credit utilization ratio can raise red flags for lenders and negatively impact your credit score. Reducing your credit utilization ratio is a smart move to improve your financial standing.

As a general rule of thumb, aim to keep your credit utilization below 30%. If your credit cards are maxed out or close to their limits, it’s time to take action. Focus on paying down your debt and keeping your credit card balances as low as possible.

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Posted on June 16, 2023 by Lauren Taylor

Financial Education, Financial Literacy, First-Time Homebuyers, Home Financing, Loan Options

credit score, Mortgage Loans

Are you dreaming of owning your own home, but struggling to afford it with today’s interest rates and home prices? Unfortunately, many homebuyers are currently in the same position. You can either put off buying a home until interest rates or home prices come down. But this market shows no signs of slowing. Or you can start the process of boosting your home buying power. From improving your credit score to saving a larger down payment, these tips will help you make the most of your buying potential.

see how much home you can afford

Understanding Your Home Buying Power

When determining how much home a buyer can afford mortgage lenders consider several crucial factors. Including buyers’ income, their credit history and score, their debt, and the amount of their down payment. Lenders also consider current interest rates and the specific loan program for which the buyer is applying. By evaluating these elements, lenders can provide buyers with an accurate assessment of their purchasing power and the mortgage amount they can handle.

Improve Your Credit Score

Boosting your credit score is a game-changer. A higher credit score not only improves your chances of home loan approval but can also qualify you for a lower rate. By paying bills on time, reducing debt, and correcting errors on your credit report, you can elevate your credit score and unlock better loan terms for your home financing.

Save For A Larger Down Payment

Saving a larger down payment can significantly enhance your home buying power. Saving more upfront cash, you can reduce your loan amount. This lowers your monthly mortgage payments and potentially qualifies you for better interest rates. Additionally, a bigger down payment shows financial stability and lowers the risk for lenders, increasing your chances of loan approval. For ways on saving a down payment check out Savvy Ways To Save A Downpayment.

Increase Your Income

Increasing your income is a powerful tool for growing your home buying power. Whether it’s through a raise, promotion, or pursuing additional income streams, a higher income expands your borrowing capacity and boosts your affordability. Invest in your skills, seek opportunities for growth, and watch your home buying power soar.

Reduce Your Debt

Paying down debt is a vital step in increasing your home buying power. By reducing your debt-to-income ratio, you demonstrate greater financial stability to lenders and improve your chances of loan approval. Moreover, lower debt levels free up more of your income for mortgage payments, allowing you to afford a higher-priced home. Prioritize debt repayment to elevate your home buying power and pave the way to homeownership.

Explore First-Time Homebuyer Programs and Grants

First-time homebuyer grants and down payment assistance programs can be game-changers in boosting your home buying power. These financial resources provide crucial support by offering funds to cover a portion of your down payment or closing costs. By taking advantage of these programs, you can lower your upfront expenses, increase your affordability, and potentially qualify for a larger mortgage. Explore available grants and assistance options to maximize your purchasing potential can making home buying possible.

Negotiate a Seller Credit To Buy Down The Mortgage Rate.

Negotiating a seller credit to buy down the mortgage rate can have a significant impact on your home buying power. By requesting the seller to contribute towards buying down your mortgage rate you can lock in a lower monthly payment. This credit can also result in long-term savings increasing your overall affordability. Talk to your real estate agent about how to leverage a seller’s credit to enhance your purchasing power in the housing market.

In conclusion, by implementing these strategies, you can effectively increase your home buying power. Whether it’s improving your credit score, saving a higher down payment, increasing your income, or leveraging assistance programs, each step contributes to your purchasing potential. Take proactive steps, make informed financial decisions, and watch your home buying power grow, bringing you closer to your dream home.

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Posted on June 15, 2023 by Lauren Taylor

Down Payment, Financial Education, Financial Literacy, First-Time Homebuyers, Home Financing, Homebuyer Education, Homebuying Tips, Loan Options

First-Time Homebuyers, Home Financing, home loans

When it comes to buying a home in the United States, affordability is a top concern for many people. With the rising costs of living, it’s important to know where you can find a good deal on a house without breaking the bank. In this comprehensive guide, we’ll explore the cheapest states to buy a home, what factors influence home prices, regional differences in affordability, and a comparison of the cost of living in each state.

see how much home you can afford

Understanding Home Affordability in the United States

Before we get into the specifics of each state, it’s important to understand the concept of home affordability. Affordability refers to the ability of a household to purchase a home given their current income and expenses. Affordability is affected by a number of factors including interest rates, home prices, and household income.

Home affordability is a major concern for many Americans, especially those looking to purchase their first home. In recent years, the cost of homes has risen significantly, making it difficult for many families to afford a home in their desired location.

How COVID-19 Effected Housing Affordability

The COVID-19 pandemic significantly altered the dynamics of work and migration, leading to a profound impact on home prices across the nation. With the rapid adoption of remote work as a result of lockdown measures and social distancing guidelines, people gained the ability to work from anywhere, unconstrained by geographical limitations.

This newfound flexibility has fueled a surge in national migration patterns, as individuals and families seek out locations that better suit their lifestyle preferences and affordability needs. Consequently, this increased demand for housing in certain areas has resulted in a significant upswing in home prices nationwide.

Regions with desirable amenities, lower costs of living, and a higher quality of life have experienced a particularly pronounced surge in property values as more remote workers choose to relocate there. This shift in migration patterns has not only reshaped the housing market but also sparked a broader reevaluation of where people choose to live, ushering in a new era of geographic mobility and reshaping economic landscapes across the country.

Factors Influencing Home Prices

Home prices can vary greatly from state to state, and even within states, due to a variety of factors. Some of the key factors that influence home prices include:

Location: Areas with high demand and limited supply tend to have higher home prices. For example, homes in major cities like New York and San Francisco are often much more expensive than homes in smaller, less populated areas.
Economic factors: States with strong economies and low unemployment rates often have higher home prices. This is because people are more likely to have stable incomes and be able to afford higher-priced homes.
Interest rates: When interest rates are low, more people are able to afford homes, which can drive up prices. On the other hand, when interest rates are high, fewer people are able to afford homes, which can cause prices to drop.
Supply and demand: If there are more buyers than there are homes available, prices are likely to go up. This is often the case in areas with limited housing inventory.

Regional Differences in Home Affordability

Home affordability varies greatly from region to region, with some areas being significantly more affordable than others. Factors that can influence these regional differences include the cost of living, job opportunities, and economic growth.

For example, the cost of living in the Midwest is generally lower than in the Northeast or West Coast. This means that homes in the Midwest are often more affordable than homes in other regions. Additionally, areas with strong job markets and growing economies, such as Texas and Colorado, often have higher home prices due to increased demand.

It’s important to note that while some areas may be more affordable than others, home affordability is still a challenge for many Americans. In fact, according to a recent study, nearly 40% of Americans struggle to afford basic needs like housing, food, and healthcare.

In conclusion, understanding the factors that influence home affordability and the regional differences in affordability can help individuals make informed decisions about where to purchase a home. However, it’s important to remember that home affordability is a complex issue that affects many Americans, and there is still much work to be done to ensure that everyone has access to safe, affordable housing.

Top 10 Cheapest States to Buy a Home

Based on data from the National Association of Realtors, here are the top 10 cheapest states to buy a home:

West Virginia

West Virginia tops our list as the most affordable state to buy a home in the US. The average home price in the state is $169,000, making it an attractive option for those on a budget.

Mississippi

Mississippi is another affordable state, with an average home price of $186,000. The state’s low cost of living and strong job market make it an attractive option for many.

Arkansas

Arkansas has an average home price of $196,000, making it one of the most affordable places to live in the country. The state is known for its natural beauty and friendly communities.

Oklahoma

Oklahoma has an average home price of $201,000, making it another affordable option for those on a tight budget. The state’s low cost of living and vibrant culture make it a great place to call home.

Indiana

Indiana has an average home price of $206,000, making it a great option for those looking for an affordable place to live. With its bustling cities and beautiful countryside, Indiana is a great place to call home.

Ohio

Ohio has an average home price of $209,000 and is known for its affordable cost of living and strong job market. The state is also home to several major universities and a vibrant arts scene.

Kentucky

Kentucky has an average home price of $220,000, making it an affordable option for those looking to buy a home. The state is known for its horse racing, bourbon distilleries, and beautiful landscapes.

Michigan

Michigan has an average home price of $222,000, making it another affordable option. The state is known for its beautiful lakes, vibrant cities, and strong manufacturing industry.

Iowa

Iowa has an average home price of $234,000, making it a great option for those looking for an affordable place to live. With its rolling hills, charming small towns, and strong job market, Iowa is a great place to call home.

Missouri

Missouri has an average home price of $238,000, making it a great option for those looking for an affordable place to live. The state is known for its beautiful landscapes, vibrant cities, and friendly people.

Comparing the Cost of Living in Each State

In addition to home prices, the cost of living can also vary greatly from state to state. Here’s a breakdown of some of the major expenses that can impact the overall cost of living:

Housing Costs

As we’ve seen, home prices vary greatly from state to state. However, other housing costs can also impact the overall cost of living, including rent, property taxes, and homeowners insurance.

Utilities and Transportation

The cost of utilities and transportation can also vary from state to state. This includes things like gas prices, electric bills, and public transportation costs.

Groceries and Healthcare

Finally, the cost of groceries and healthcare can also impact the overall cost of living. These costs can vary based on factors like local taxes, competition among providers, and state regulations.

In conclusion, if you’re looking for an affordable place to buy a home, there are many options to choose from. By understanding the factors that influence home prices and the cost of living in each state, you can make an informed decision about where to invest in your future. Happy house hunting!

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Posted on June 9, 2023 by Lauren Taylor

First-Time Homebuyers, Homebuyer Education, Homeownership

First-Time Homebuyers, Homebuying Tips

When it comes to purchasing a home, one of the biggest obstacles for many buyers is saving the down payment. While conventional wisdom dictates that a down payment should be 20% of the purchase price, this is not always realistic for everyone. Fortunately, down payment assistance programs are available to help mitigate this hurdle. In this article, we’ll explore the ins and outs of these programs, how to find and apply for them, and dispel some common myths.

Understanding Down Payment Assistance Programs

Buying a home is a significant investment and coming up with the down payment can be a major obstacle. Fortunately, there are down payment assistance programs available to help buyers achieve their dream of homeownership.

What is a Down Payment Assistance Program?

A down payment assistance program is a type of program that can help buyers cover costs associated with a home purchase. These programs are available by a variety of entities, from state and local governments to non-profit organizations and even employers.

One example of a down payment assistance program is the Homeownership Opportunity Program (HOP) offered by the California Housing Finance Agency. This program provides eligible first-time homebuyers with up to 3% of the purchase price of the home in down payment assistance.

Types of Down Payment Assistance Programs

There are several types of down payment assistance programs that buyers can take advantage of. Some programs offer grants, which do not need to be paid back, while others offer loans that do need to be paid back over time.

For example, the Michigan State Housing Development Authority offers a down payment assistance loan of up to $7,500, which is repayable over a 10-year term at 0% interest.

Another type of program is a match savings program. In this type of program, the buyer saves money towards their down payment and the program matches those savings. This effectively doubling the homebuyers cash toward their down payment.

For example, the Individual Development Account (IDA) program offered by the United Way of Greater Los Angeles provides a 2:1 match for every dollar saved, up to a maximum of $6,000. This means that if a buyer saves $3,000, the program will provide an additional $6,000 in down payment assistance.

Eligibility Requirements for Assistance Programs

Each down payment assistance program will have its own set of eligibility requirements. Generally, buyers will need to meet certain income limits, have good credit, and attend a homebuyer education course. Some programs may also have additional requirements, such as being a first-time homebuyer or purchasing a home in a certain area.

For example, the City of Chicago’s Home Buyer Assistance Program requires that buyers have a credit score of at least 640, attend a homebuyer education course, and purchase a home within the city limits. In addition, the program provides up to $7,500 in down payment assistance to eligible buyers.

It’s important for buyers to research the eligibility requirements for each program they are interested in and make sure they meet the criteria before applying.

Overall, down payment assistance programs can be a valuable resource for buyers who need help with their down payment. By taking advantage of these programs, buyers can achieve their dream of homeownership and build equity in their own home.

Benefits of Down Payment Assistance Programs

Lower Initial Costs

One of the most obvious benefits of down payment assistance programs is that they can lower the initial costs associated with buying a home. Without these programs, many potential buyers may be unable to afford the down payment, leaving them unable to purchase a home or delaying the purchase until they can save up the necessary funds.

Increased Homeownership Opportunities

By making homeownership more affordable, down payment assistance programs can help increase opportunities for people to become homeowners. This can be especially valuable for individuals and families who may not have considered homeownership a possibility due to financial constraints.

Financial Stability and Flexibility

Homeownership can provide a level of financial stability and flexibility that renting cannot offer. By allowing more people to become homeowners, down payment assistance programs can help stabilize local communities and create long-term financial benefits for those who participate.

How to Find and Apply for Down Payment Assistance Programs

Buying a home can be an exciting and rewarding experience, but saving up for a down payment is a challenge. Fortunately, there are many down payment assistance programs available to help make homeownership more affordable. Here’s a step-by-step guide on how to find and apply for these programs.

Researching Available Programs

The first step in finding down payment assistance programs is to research what programs are available in your area. This can be done by contacting your local housing authority or non-profit housing organization, or by doing an online search for programs in your state or local area.

It’s important to note that not all programs are the same. Some may have specific eligibility requirements, such as income limits or location restrictions. Others may offer different levels of assistance, such as grants or loans. Take the time to research and compare programs to find the one that best fits your needs.

Additionally, some programs may require you to attend a homebuyer education course before you can apply. These courses can provide valuable information on the homebuying process, including budgeting, credit management, and mortgage options.

Preparing Necessary Documentation

Once you’ve identified a program you’re interested in, you’ll need to gather the necessary documentation to apply. This may include things like income verification, proof of employment, and credit reports.

It’s important to start gathering these documents early, as the application process can take time. You may also want to consider getting pre-approved for a mortgage before applying for down payment assistance. This can help you determine how much assistance you’ll need and make the application process smoother.

Navigating the Application Process

The best way to see what programs are available to you is to work with an expert. Our Savvy mortgage specialists will review your situation and provide you with a list of options. To speak with a mortgage and down payment assistance expert complete this quick Buyer Power Approval™.

Once we’ve identified which programs you should apply for you will complete an application to the program and submit any needed documentation. Be prepared to follow up with the program administrator to provide additional information if needed.

It’s important to note that the application process can take time, so be patient. Some programs may have a waiting list or limited funding, so it’s important to apply as soon as possible.

Once you’ve been approved for assistance, you’ll typically receive the funds at closing. This can help reduce your out-of-pocket expenses and make homeownership more affordable.

Overall, down payment assistance programs can be a valuable resource for first-time homebuyers or those who may be struggling to save for a down payment.

Common Down Payment Assistance Program Myths and Misconceptions

Myth: Assistance Programs are Only for First-Time Homebuyers

Down payment assistance programs target first-time homebuyers. Many programs are available to all homebuyers, regardless of whether or not they have owned a home before.

Myth: You Must Have a Low Income to Qualify

While many programs do have income limits, these limits can vary widely depending on the program and location. It’s always worth researching programs in your area to see if you qualify.

Myth: Down Payment Assistance Programs are Too Good to Be True

Down payment assistance programs may seem too good to be true, but they are a great tool for aspiring homeowners. Want to know what programs may be available to you? Complete our quick Buyer Power Approval and our team will gather options that fit your needs.

2 Comments

Posted on June 2, 2023 by Lauren Taylor

Down Payment, Financial Literacy, First-Time Homebuyers, Homebuying Tips

down payment, First-Time Homebuyers, Home Financing, Homebuying Tips

Buying a home is one of the biggest financial decisions you’ll ever make. The homebuying process can be a little overwhelming, but with the right guidance, you can successfully navigate it. In this guide, we’ll take you through the home-buying process step by step, from understanding the basics to making an offer and negotiating.

Understanding the Homebuying Process

Buying a home is a significant milestone in anyone’s life. It’s a major financial decision that requires careful planning and preparation. Understanding the home-buying process can help you make informed decisions and avoid common mistakes.

The Importance of Preparation

Before you begin your search for a new home, it’s important to do your homework. Take the time to assess your financial readiness and evaluate your credit score. This will help you determine how much house you can afford and what kind of mortgage you qualify for.

Infographic of homebuying process showing each step of what a buy can expect when buying their first home.

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Determining your budget and saving for a down payment is also crucial. The down payment is typically a percentage of the home’s purchase price that you pay upfront. This can range from 3% to 20% depending on the loan program and lender you choose. Saving for a down payment can take time, so it’s important to start early.

Understanding mortgage options and comparing rates from different lenders is also an important step. There are many different types of mortgages available, each with its own pros and cons. A mortgage broker or loan officer can help you navigate the options and find the best fit for your needs.

At this stage, it’s also important to identify your needs and wants in a home. Consider the size of the property, the number of bedrooms and bathrooms, and any special features you require. Think about the location and the type of neighborhood and community you want to live in. Working with a real estate agent can make this process much easier. They can help you find homes that meet your criteria and negotiate with sellers on your behalf.

Key Players in the Homebuying Process

There are several key players involved in the home-buying process. These include lenders, real estate agents, home inspectors, and attorneys. Each of these professionals has a specific role to play in helping you buy your home.

Lenders are responsible for evaluating your creditworthiness and determining how much money they are willing to lend you. They also set the interest rate and terms of your loan. Real estate agents help you find homes that meet your criteria, negotiate with sellers, and guide you through the closing process. Home inspectors evaluate the condition of the property and identify any issues that need to be addressed. Attorneys review contracts and legal documents to ensure that your rights are protected.

Common Homebuying Myths and Misconceptions

There are many myths and misconceptions surrounding the home-buying process. One of the biggest misconceptions is that you need to have a 20% down payment in order to buy a home. In reality, there are many loan programs that allow you to put down much less. FHA loans, for example, require a down payment of just 3.5%.

Another common myth is that you need perfect credit in order to qualify for a mortgage. While it’s true that having good credit can make the process easier, there are loan options available for those with less-than-perfect credit. FHA loans, for example, are available to borrowers with credit scores as low as 500.

By understanding the homebuying process, you can make informed decisions and avoid common mistakes. With the right preparation and guidance, buying a home can be a rewarding and exciting experience.

Assessing Your Financial Readiness

Evaluating Your Credit Score

Your credit score is a key factor in determining your eligibility for a mortgage and the interest rate you’ll be offered. In general, a credit score of 620 or higher is needed to qualify for most mortgage programs. It’s a good idea to check your credit report and score before you begin the home-buying process and take steps to improve it if necessary.

Determining Your Budget

Your budget will play a big role in determining the type of home you can afford. As a rule of thumb, your monthly mortgage payment should not exceed 28% of your gross monthly income. You’ll also need to factor in other expenses, such as property taxes and homeowners insurance.

Saving for a Down Payment

A down payment of 20% or more can help you avoid paying for private mortgage insurance (PMI). However, many loan programs allow you to put down as little as 3% to 5%. If you’re struggling to come up with a down payment, there are down payment assistance programs available in many areas. Or check out these savvy ways to save for your down payment.

Understanding Mortgage Options

There are many different types of mortgages available, each with its own pros and cons. Some of the most common types include fixed-rate mortgages, adjustable-rate mortgages, and government-backed loans. Make sure you understand the differences between these options and choose the one that’s right for you.

Finding the Right Home

Identifying Your Needs and Wants

When it comes to finding the right home, it’s important to identify your needs and wants. This will help you prioritize your search and narrow down your options. Make a list of the features you need in a home, such as the number of bedrooms and bathrooms, and the features you want, such as a pool or a large yard.

Researching Neighborhoods and Communities

The neighborhood and community you choose to live in will play a big role in your overall satisfaction with your new home. Research different areas and visit them in person to get a feel for the local culture and amenities.

Working with a Real Estate Agent

A real estate agent can help you find the right home for your needs and budget. They can also help you navigate the complexities of the home buying process, including making an offer and negotiating. Look for an experienced agent who knows the local market well.

Attending Open Houses and Home Showings

Once you’ve narrowed down your options, it’s time to start attending open houses and home showings. This is your chance to get a feel for the property and ask any questions you may have. Take your time and don’t rush into a decision.

Making an Offer and Negotiating

Understanding the Offer Process

Making an offer on a home involves submitting a written proposal to the seller. This proposal includes the purchase price, any contingencies or conditions, and the proposed closing date. The seller then has the option to accept, reject, or counter your offer.

Determining Your Offer Price

Determining the right offer price can be a tricky process. You’ll want to take into account factors such as the condition of the home, the location, and the local market. Your real estate agent can help you come up with a fair and reasonable offer price.

Contingencies and Conditions

A contingency is a condition that must be met in order for the sale to go through. For example, you may include a contingency that the sale is contingent on the property passing a home inspection. Here is a rundown of problems that would be red flags if found on a home inspection. Make sure to understand the contingencies and conditions you include in your offer.

Handling Counteroffers and Negotiations

It’s not uncommon for the seller to make a counteroffer or for negotiations to take place. This can be a stressful and emotional process, but it’s important to remain calm and level-headed. Work with your real estate agent to come up with a fair and reasonable compromise.

Buying a home is a big decision, but it doesn’t have to be a stressful one. By following the steps outlined in this guide, you can successfully navigate the home-buying process and buy your dream home with confidence. Remember to take your time, do your research, and work with experienced professionals who can help you along the way.

3 Comments

Posted on June 1, 2023 by Lauren Taylor

Down Payment, First-Time Homebuyers, Homebuying Tips, Mortgage Process, Moving and Relocation, Real Estate Agent

First-Time Homebuyers, Homebuying Tips, Real Estate Agents

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First-Time Homebuyer Education

Everything You Need To Know About Empowered DPA Program

Roots of the Empowered Down Payment Assistance Program

How Does the EPM Empowered DPA Program Work?

How is Empowered Down Payment Assistance different from other First-Time Homebuyer Grants

Empowered DPA Qualification Guidelines

Requirements for the Program

Exactly How To Apply for the Empowered Down Payment Assistance Program

Property Taxes

Homeowners Association (HOA) Fees

Private Mortgage Insurance (PMI)

Home Inspection Costs

Closing Costs

Home Insurance

Moving Expenses

House Hold Appliances

Maintenance and Repairs

Utilities and Home Services

Eligibility Requirements for a Conventional Loan

Understanding Conventional Loans

Versatility in Property Types

Types of Conventional Loans

How Conventional Loans Work

Cost of A Conventional Loan

Upfront Costs of Conventional Loan

Down Payment

Closing Costs

Private Mortgage Insurance

Monthly Mortgage Payment of Conventional Loan

What are the interest rates for conventional mortgages?

Monthly Mortgage

Input

Monthly Mortgage Payment

Comparing Conventional Loans to Other Home Loan Types

Conventional vs VA Loan

Conventional vs FHA Loan

Conventional vs USDA Loan

Mistake #1: Not Having a Realistic Budget

Mistake #2: Not Correcting Credit Report Issues

Mistake #3: Not Comparing Mortgages Options

Mistake #4: Leading with Emotions

Mistake #5: Making Big Financial Decisions During the Home Buying Process

Mistake #6: First-Time Homebuyers Should Never Waive the Home Inspection

Mistake #7: Underestimating the Costs of Owning a Home

Why FHA Loans are Great for First-Time Homebuyers

Who is considered a first-time homebuyer?

FHA Loan Requirements

Benefits of the FHA Loan

Requires a low down payment

Flexible credit score standards

Competitive Interest Rates

Drawbacks of FHA Loans

Mortgage Insurance Premiums

FHA Loan Limits

Home Requirements for FHA Loans

Commonly Asked Questions About First-Time Home Buyer Information on The FHA Home Loan

FHA vs Convention Home Loan

Home Buying Process with The FHA Home Loan

Understanding the Panama City Real Estate Market

Popular Neighborhoods and Areas

Market Trends and Predictions

The Home Buying Process in Panama City

Mortgage Pre-approval and Financing Options

Finding a Real Estate Agent

Searching for Your Dream Home

Making an Offer and Closing the Deal

Cost of Living in Panama City

Housing Expenses

Utilities and Transportation

Food and Entertainment

Healthcare and Education

Tips for Relocating to Panama City

Preparing for the Move

Adjusting to the Climate and Lifestyle

Networking and Building a Community

The Florida Real Estate Market

Florida Homebuying Process

Get your Home Loan Pre-Approval

Choose an Agent

Find A Home