Owning a home is a part of the quintessential American dream. Many Iowans, however, believe that home ownership is out of their reach.
Each month they pay rent with nothing tangible to show for their efforts. Buying a home, though, can be less complicated and more affordable than one might think. The payments can help homebuyers build equity and result in tax advantages. Buying a home also instills a sense of pride in ownership and a feeling of security and stability that is welcome in a time of national and economic uncertainty such as this.
There are many options available for those seeking to purchase their first home. These options put home ownership within reach of many who thought it was impossible to own a home. You can realistically look at buying a home if you have a 5, 10 or 20 percent down payment on your home. Even if you don't have that much saved, first-time buyers can qualify for financing towards their down payment. Some programs allow you to roll the closing costs into the amount financed, or enable you to put no money down.
Home ownership is a goal that is achieved through smart planning, correct choices and knowing your options. Here are some tips that can help get you on the right track to owning your own home.
Lock in while interest rates are low. Interest rates are at their lowest levels in years. With interest rates favoring consumers instead of lenders, it is a buyer's market. Lower interest rates translate into lower monthly mortgage payments, making it more affordable to buy a home. With low interest rates and the right home, your monthly mortgage payments may not be much more than rent. Plus, you'll be able to build equity and help establish a good credit rating for the future.
Refinance existing loans. If you have other loans you're making payments on, consider refinancing and adding your savings from the lower interest rates towards a down payment on a home or mortgage payments. This includes getting rid of high interest credit cards and consolidating your debt. Sometimes you can save hundreds per month by making one monthly payment instead of several.
Borrow wisely. Many people think traditional banks are the only option when looking into financing a home purchase. Don't forget to look into other lending institutions such as private mortgage lenders, nonprofit groups and even parents or friends.
Explore low-cost loans. State housing agencies, credit unions and the government all sponsor various loan programs, including the Veterans Administration (VA) and the Federal Housing Administration (FHA). These programs help low- and middle-income buyers afford buying a home. The benefits to these sources range from low down payments to reduced interest rates.
With interest rates at such low levels, now is a great time to look into purchasing your first home. Owning a home is a dream that you can attain with careful planning and wise decision-making. Ask a mortgage professional for reliable information to make owning your dream home a reality.
Dan Berglund is a branch manager and loan officer at DMI Mortgage, 602 Flindt Dr., P.O. Box 1303, Storm Lake.