6 Little Known Facts That Can Help You Become a Sacramento Homeowner
The American Dream… we all have it. We all hope that someday we can finally stop paying our landlords rent and own our own home. But all too often we feel stuck in the trap of renting an apartment that doesn’t quite feel like it’s really ours.
And how could it? You can hardly hammer a nail into the wall without stirring up a hassle with your landlord. Understandably this leads to the “renter’s blues” and you feel stuck in a rut like you’ll never get out of and reach your goal of becoming a homeowner.
But Don't Feel Trapped Anymore!
It may surprise you, but it really doesn’t matter how long you’ve been renting, or how dire your financial circumstances may be. The truth is, there are some little known facts that will help you shake off your renter status and finally become a Sacramento homeowner. With the tips I’ll provide you in this article, you’ll quickly see how you can:
- Save for a down payment
- Stop making your landlord rich, and
- Stop wasting thousands of dollars on rent
The biggest problem that most renters face isn’t the ability to make the monthly mortgage payment, as you pretty much do that every month already when you pay rent to your landlord. Instead, the biggest challenge aspiring homeowners face is saving enough money to make the down payment required by most lenders to purchase a home.
But, nowadays saving for this lump sum cash payment isn’t as difficult as it used to be, and is actually quite easier than you think. Consider the following points:
#1) You Can Buy a Home with Much Less Down Than You Think
You may not be aware of them, but there are actually some local or federal government programs (for example, first time buyer programs) that can help renters like yourself buy your first home. In fact, you can still qualify for a first time buyer program even if your spouse has already owned a home in the past!
Ensure that your real estate agent is knowledgeable in this important area and can offer programs to help you with your options or point you in the direction of a trustworthy lender who can help.
#2) Your Lender May Be Able to Help You with Closing Costs
A little known secret is that even if you don’t have the finances ready to go for a large down payment, if you are free of any major debt, and own another asset such as a car free and clear, your lender might be willing to let you borrow the money for the down payment by securing this asset as collateral! It won’t always be available, but it’s worth asking your lender if you need some help.
#3) You Might Be Able to Arrange Seller Financing
If you’re struggling to arrange proper financing to purchase your first home, sometimes you can arrange a type of seller financing that can help you get into the home. Some sellers may be willing to arrange a “seller take-back” situation where they carry a second mortgage for you.
In this type of situation, the seller acts as a lender of sorts, and instead of making a large lump-sum payment to them for the home up front, you would make monthly payments to the seller in order to pay them back.
#4) You Might Be Able to Generate a Debt-Free Cash Down Payment
This is a little creative when it comes to financing, but depending on your situation you may be able to borrow money for certain investments to a specified level and create a larger tax refund for yourself that you can then use for a down payment on a home.
Although the money that you borrow for these investments is technically a loan, the monthly payment is often quite low, and ultimately in the end the money that you put into your home and investment will be yours.
#5) You Can Still Buy a Home Even If You Have Bad Credit
Good credit is often seen as a trade-off for a lower down payment and lower interest rate, so if you have a less than optimal credit rating you can still purchase a home if you are able to come up with a larger down payment or secure a loan with another type of equity.
If those options don’t work, you can always refer to #3 above and try to arrange the seller to carry back some of the financing for you.
#6) You Can Get Pre-Approved for a Loan Before You Start Looking
Pre-approval is a quick and easy process that will let you know up front how much of a loan you can qualify for and what type of down payment will be required to secure it. Nowadays it’s so simple you can do it over the phone, or even online!
Most renters don’t realize that a pre-approval letter from your lender is pretty much as good as money in the bank. Not only that, it will make your offers much more appealing to sellers as they will know that you can follow through on your offer and see the transaction all the way to closing.
Be sure that you only work with trustworthy, qualified mortgage professionals who put your interests and goals first. Teaming up with a mortgage professional can make the difference between being stuck in the renter’s rut for the rest of your life and finally achieving the dream of owning a home.
How to Stop Paying Rent and Own Your Sacramento Home
As you probably already know, there are plenty of important issues that affect you as a renter. Ask yourself… “Why should I continue throwing away my money on rent when my agent could easily show me my options to becoming a homeowner in just a few minutes?”
This conversation costs nothing, and we can discuss you specific needs and plan how we can reach of your goal to stop renting and start owning. By taking the time to review your options and learn about what’s possible for you to reach your dream of owning a home, you’ll be all the more prepared and relaxed when it comes time to take this important step.