Getting you a Starter Home for the Holidays…

Today’s discussion is geared toward New / First-Time Homebuyers and looking for the best starter home. Maybe you’re a millennial breaking into the world, or a professional looking to put down some small roots in an area. This home isn’t going to be your dream home or your forever home – but it is going to be HOME.

“If I’m Renting my current home/condo/apartment, I’m not paying a mortgage!” … MYTH!

Truth is… you’re paying a mortgage either way. As a homeowner, you’re paying your own mortgage and building equity – but as a renter, you’re paying the building owner’s mortgage for the property or at the least the property taxes. So, you may want to reconsider if renting is the best choice for you! You could be investing your money in your own property.

5 Things to Look for in the Best Starter Home

1. Low Maintenance – Especially low maintenance fees

Unless you LOVE yard work, look for a starter home with a smaller outside space. Homeowner responsibilities can be a bit more than you may be used to, so don’t take on acres and acres of land if mowing and landscaping aren’t your strong suit (and you don’t want to spend a lot of money on care). Or, look for a home that is part of an affordable Home Owner’s Association that would take care of the outdoor work for you. Yard management is very important, especially if you still plan to do a lot of traveling [still returning home for the holiday seasons?].

2. Smart Location

The golden rule of real estate: “Location, Location, Location” – Look for your new starter home in a good location. Close to your place of work, or convenience shopping & needs. Do you normally take public transportation? Look around for areas on bus routes. Or, do you like running in the park? Look for home options near your favorite places! And remember, you don’t have to look far away from the city to find your price range – especially if living far out doesn’t fit your lifestyle … bringing us to tip #3!

3. Easy Lifestyle Transitioning

Try not to suffer yourself culture shock by moving from a locale where you can walk to coffee shops all the way to living far out in quiet suburbia. You can consider condos or townhouses as a great starter home option. They can have convenient HOA options or overall low maintenance.

4. Budget-Friendly

Remember, this is your starter home. Don’t get carried away just because you may qualify for a low down-payment or low monthly payments on your first mortgage. Choose a starter home that fits your needs and lifestyle within reason. Don’t overwhelm your finances on your first property. Your forever home / dream home come later in life.

Talk to a Loan Officer about what you can get pre-approved / pre-qualified for. They can help you make the decision of what price range is the smartest for your budget and spending habits. Rector Hayden Mortgage office is located in our main Lexington building – and would love to meet with you to discuss your options, no obligation!

Get started easy by using the RH Mortgage online Affordability Calculator

5. Manageable Care & Upgrade Options

Don’t get sucked in to the DIY Pinterest phase and think you can ‘total home makeover’ a property. If you know you aren’t handy, then don’t buy a fixer-upper. (Or, on the other hand – if you have a great contractor in your family, then buying a fixer-upper may be a great starter home project!). What may look like a great deal still needs to be inspected. Too many repairs can become quite costly and end up costing your much more.

BONUS: If you’re thinking of renting for 5 years or so to save up money to purchase your next home – consider this… Sometimes life can get in the way of a long-term plan like that. Your savings for a big down payment could end up going elsewhere. You may be closer than you think to making a good down payment and getting your first home!

Want to see what the first step is? Check out the RectorHayden.com Buying Journey [Click Here].

This article is part of Rector Hayden REALTORS^® – Home for the Holidays 2015
series of home buying and selling.

Incentives are high and the market is encouraging for new homebuyers, especially Millennials, to begin investing in real estate. With changes in federal policy, as well as changes in Fannie Mae and Freddie Mac application – it’s become easier for Americans to purchase a house due to lower down payments!

A millennial that works here in our Lexington office recently purchased a gorgeous home through Fannie Mae and a Rector Hayden REALTOR – and was able to buy such a dream home due to the lower down payment requirements.

Many millennials aren’t aware of the change in policy though! Becoming an expert resource in this information could be the key to attract millennial business and growing your sphere to include this new generation of home-buyers!

Below are some snippets from a recent USA Today article discussing the lower down payments, or you can read the whole article on USAToday.com here: http://www.usatoday.com/story/money/personalfinance/2015/02/15/3-down-payments-lure-first-time-homebuyers/23424759/

– In December, mortgage giants Fannie Mae and Freddie Mac announced they would reduce the minimum down payment on certain mortgages from 5% to 3%. For someone buying a $150,000 home, the change means the difference between a down payment of $7,500 and $4,500.

– In January, the Federal Housing Administration announced it was reducing mortgage insurance premiums by 50 basis points. The White House said the reduction would save the average homebuyer about $900 a year and would enable about 250,000 people to buy a home.

– Typically, to qualify for a 3%-down mortgage, borrowers need a credit score of at least 620. But without a good job and a solid explanation for credit blemishes, buyers will probably need a score of 660 to 680 – The minimum score for FHA mortgages is 600.

– This year, Millennials are poised to overtake Baby Boomers as the nation’s largest generation, so getting them to trade rent checks for mortgages is seen as critical to strengthening the housing market.

Thanks for tuning in to #RHRTipTuesday – for more information about reaching the millennial market or strengthening your marketing strategies – don’t forget about Rector Hayden’s Social Media Marketing Class every month! This month’s class will be held on June 30th.