Categories: Rev. Dr. Charles Butler,
The home buying process remains a difficult, complex, and nerve wrenching process to complete. I remember speaking with a New York State Judge and she told me that completing the home buying process was more difficult and stressful than preparing and passing the bar exam. But you can successfully complete this process.
You cannot afford to be intimidated by rising home values or higher interest rates. You cannot allow yourself to become overwhelmed by the number of prospective home buyers competing against you for that same property.
You must stay focused on doing ‘whatever is necessary’ to successfully complete the process. You must have an intense desire to become a first-time homeowner. You must have the determination that nothing or no one will be allowed to be an obstacle and block your progress towards homeownership.
You must go into the process knowing that housing segregation and discrimination still exist. Even though there are now federal fair housing laws in place racial hatred is still a harsh reality. You must demonstrate the disciple to continue the process to its completion. Don’t quit, don’t give in to negativity.
An analysis of recent successful home buyers revealed some interesting common characteristics among them. As prospective first-time buyers this information could be beneficial: (1) they had adequate savings. This should not come as a surprise.
Depending on what type of property you are buying, you will need approximately $20 – 25K or more for the down payment and closing costs. Have the personal discipline to eliminate wasteful spending. Stick to your budget. Make financial sacrifices. For example, consider taking a weekend vacation rather than two weeks.
Most of these buyers had a stable and solid income. This is now extremely important because banks are only lending about 3 ½ – 4 ½ times your annual income. So, the more money you make, the more you will be able to afford. However, for low to moderate income buyers, you may have to put an even larger amount down in some cases 25-30% of the purchase price!
(2) They had a solid credit history. In today’s market, very few lenders will offer you a mortgage with a weak credit score. Most banks are requiring a minimum score of 660 or higher. Remember the higher your score, the better interest rate you will be able to secure. As you prepare for homeownership, continue using your credit wisely. High outstanding credit balances can severely reduce your loan amount.
(3) They had a trusted and experienced team of professionals assisting them through the process. Start assembling your team now to work with you. Take your time getting referrals from friends and your housing counselor. Put together a solid plan of action and stick to it.
If you are interested in attending the workshop or have questions regarding the home buying process, contact Rev. Dr. Charles Butler at (212) 281 4887 ext. 231or email at cbutler@hcci.org.
