We couldn’t let homeownership month go by without celebrating the opportunity of owning your own. Homeownership is a dream for many people, which is why we celebrate National Homeownership Month every June. This year, Richmond Neighborhood Housing Services wants to celebrate and give back by sharing some tips for homebuyers! Whether it’s your first time or you’re an experienced homeowner, it’s always nice to brush up on some basic tips.
Save Up for a Down Payment
20% is a standard amount for a down payment; however, many lenders will accept much less. There are also programs available that offer first time homebuyers the ability to put down low down payments on their home — from 0 – 3 ½ % in some cases. If you’re unsure of what programs you qualify for, it’s important to work with the housing counseling agency to explore down payment assistance programs and how much of a mortgage you can afford. There are also many tools you can use to calculate how much of a down payment you should save for, such as a down payment calculator. Other ways you can save include setting aside your tax refund or work bonus and implementing a savings plan where money is added to an account automatically every month.
Research Assistance Programs
There are many different assistance programs available, especially to first time home buyers. Many programs include incentives, such as tax credits, low down payment loans, and even interest-free loans up to a certain amount. Some of these programs include:
- Federal Housing Administration (FHA): great for first-time home buyers that may have a rocky credit history
- U.S. Department of Agriculture (USDA): targets rural areas and allows 100% financing by offering lenders mortgage guarantees
- Veterans Affairs (VA): helps services members and their families buy homes and are usually generous when it comes to down payments and mortgage insurance
Budget for the Entire Buying Process
Not only do you need to save for your down payment, but you also need to plan for closing costs and funds you may need after you move in. Closing costs can run anywhere from 2 to 5% of your loan amount. You can decrease the cost by asking if the seller with cover a portion of the closing costs, or compare prices for certain closing expenses such as homeowners insurance, home inspections, and title searches. You also need to save money for things that will go inside your home, including furnishings, new appliances, or simple upgrades.
Richmond Neighborhood Housing Services has been changing the narrative of homeownership in the Bay Area since 1981. If you’d like to learn more about how we can help you accomplish your goal of homeownership, please give us a call at 510-237-6459.