The rental market is a HUGE part of our industry, and very profitable for those that are on the right side of it. How can you start paying your own mortgage instead of your landlord’s?
1. Start Saving NOW
This seems like a fairly simple concept right? Then why are so many people still living paycheck to paycheck? This could be an entire novel of itself, so I won’t go into crazy details here, but consider taking these simple steps to help building up your down payment. Open a separate savings account, and label it “Down Payment.” Pay yourself first – this means that with every paycheck that comes in – consider putting 10% to 20% of it DIRECTLY into your newly created account before paying bills, rent, or anything else. If you can’t afford 10%, start with 5% and work your way up, the important part is getting started. Remember, many FHA loan programs only require 3.5% down, so on a $200,000 home or condo you are looking at a $7,000 payment. We are all capable of it!
2. Keep An Eye On Your Credit
Poor credit is one of the most common reasons that you might be denied a mortgage. Shoot for a minimum score of 680 and work your way up from there. There are many helpful sights like creditkarma.com that will help you be aware of your scores, how they are affected, and what you need to do to raise them. The fastest and most effective way of building your credit is to go talk with a lender. Lender’s deal with this on a daily basis and can not only tell you which accounts need to be paid down to raise your credit, but they can tell you down to the penny how much needs to be paid off on each account. Credit repair is not as hard as it sounds once you have an understanding of what needs to be done. You can never start talking with a lender too early and if you need some good suggestions please reach out to us.
3. Help Settle a New Location
With the amount of growth that is expected in the valley (population is projected to double in the next 15 years) there is going to be a TON of new construction. Most of which will be located in areas that don’t currently have any houses located there. Herriman, Saratoga Springs, Lehi, Bluffdale, and other new area’s are poised to have significant growth in value. As builder’s roll out new projects, they are done in phases. Generally there is a price increase, sometimes a significant price increase with each new phase. That being said, if you can get in on the first, or at least one of the earlier phases you will be able to get a great deal on a new home.
4. Have Your Rent Paid For You
If you have no problem qualifying for a home, but lack the ability to make the payment on your own there are several solutions. The most convenient is to find a property that has a mother-in-law apartment attached to it. It is very common to actually pay LESS for your home than you did renting your previous place if you structure this correctly. If you want to explore this further, consider renting out rooms in your house on top of renting the mother-in-law. Want to live for free? This is how it is done. The key to this entire situation is to carefully select your renters. Pick someone that you will get along with, and you know will have ZERO problems in paying rent, even in the event that they lose their job.
5. Ask Your Family
As much as everyone wants to do everything on their own, if you are close to your down payment and have a family member that is willing to help you out with the rest of it then take the help. Rates are increasing, home values are rising, and waiting the extra time to come up with the money on your own has the potential to cost you thousands. Come up with a creative solution to pay back the money if you need to, but the bottom line is put down your pride and ask for help. You may be surprised at the response you get, and it could have an amazing impact on your financial future.
If you are curious about getting into a house, but have no idea how or where to get started then reach out to our new home buyer specialist Brad Hansen at (801) 230-5236 and you will be well taken care of.