You may feel mentally and emotionally prepared to become a homeowner, but is your budget ready? Let us help you understand what you need to consider.
CAN I AFFORD TO BUY A HOME?
Are you considering the switch from renting to owning for reasons like building equity, finding more space, or achieving your own version of the American Dream? While only you can decide if you’re emotionally ready for homeownership, there are clear financial benefits, such as building equity, avoiding rent increases, and potentially seeing your home’s value grow. However, successful homeownership starts with knowing your financial health. Arbor Financial Group can help you assess your credit, savings, and budget to determine how much home you can afford and guide you through the homebuying process.
DOWN PAYMENT ASSISTANCE
Many renters discover that a monthly mortgage payment can be similar to rent, but the challenge of saving for a down payment often stands in the way of homeownership. The good news is that there are down payment assistance (DPA) programs designed for those who can afford a mortgage but haven't saved enough for a down payment.
Contrary to popular belief, you don't always need 20% down. There are loan options with lower down payment requirements, and many of these are eligible for DPA programs. These programs, often in the form of grants or forgivable loans, are available to first-time homebuyers and some repeat buyers who haven't owned a home in the last three years. Eligibility may depend on factors like location, income, and participation in a homebuyer education course.
Arbor Financial Group can help you explore DPA options and find the right program to make your dream of homeownership a reality.
LOW-DOWN-PAYMENT MORTGAGE OPTIONS
For many potential homebuyers, the down payment is the biggest hurdle. The amount you choose to put down impacts your mortgage and monthly payments, but it’s important not to deplete your entire savings. Consider emergency funds, moving expenses, and other financial goals when determining how much to put down.
You don't need 20% for a down payment - many loans allow as little as 3% to 5%. Options like VA, FHA, and private mortgage insurance (PMI) can help reduce the upfront cost, with each program having its own requirements and benefits. Arbor Financial Group can guide you through these options to find the best solution for your homebuying journey, including assistance with down payment gifts.
The key is balancing what you can afford now with your long-term financial security.
GETTING A MORTGAGE WITH STUDENT LOANS
Managing student loans while buying a home is possible, and it can be a smart decision with the right planning. Many options are available to help you manage both student debt and homeownership, but it’s important to look at the big picture.
Student loans come in federal and private loan options, each with different repayment plans, terms, and interest rates. Keeping up with your payments helps build your credit, which is essential for securing a mortgage. Maintaining a strong credit history and avoiding late payments can improve your chances of approval.
At Arbor Financial Group, we can help you navigate the process, assess your financial health, and explore mortgage options that work for your student loan situation. It’s all about making informed choices to achieve your homeownership goals.
WHAT IS MORTGAGE INSURANCE
Private mortgage insurance (MI) helps homebuyers purchase a home with a down payment of less than 20%. It protects lenders in case of foreclosure, allowing them to offer loans with lower down payments. For borrowers, MI provides benefits like buying a home sooner, increased buying power, and more cash flow flexibility. Some MI options even allow for refunds or cancellation once the loan balance reaches a certain level.
Compared to FHA mortgage insurance, private MI typically offers lower costs and the possibility to cancel coverage once enough equity is built in the home. Arbor Financial Group can help you explore MI options and determine which one best suits your financial situation, giving you more choices and flexibility as you buy your home.
