First Step for First Time Buyers
A first time home buyer is mainly looking for a primary residence instead of a property for an investment. Real Estate investors buy, hold and sell real estate to generate an income or as tax shelters to benefit the investor’s financial portfolio. Many consider buying a home as a primary residence as an investment but your financing of the purchase and exit strategy is different than an investor.
For the first time home buyer, finding a mortgage professional is going to be the best place to start. The lending agent will help you determine what you can afford and might offer suggestions to improve the your financial situation. Just like any service it is wise to get a quote from more than one lender. The quote can be from a bank or mortgage company. Find a lending institution that will offer good interest rates and an agent you can trust. You want to find a mortgage broker who can explain all the details of real estate investing and apply it to your personal situation.
If you don’t have enough money for a down payment then you can either wait and save for it, or find a seller who will let you lease-to-own or rent-to-own a property. Lease/rent-to-own might be an option for people with credit score problems. If a person has poor credit and a lot of capital available, then a large down payment could help them get into a home. There are many options to help people buy their first home. Some lenders, federal and local government agencies, and non-profit organizations have programs for first time home buyers which are not available to real estate investors.
Investing in real estate is a major expense whether it is for a first time home buyer or a real estate investor. Having a financial plan and understanding your borrowing options is vitally important before even looking for a home. There are many options for financing a home and talking to a mortgage professional is the place to start.