I love a good science-fiction novel. I was never much of a reader until this past year. Now, I make myself a little breakfast and plop down with a book for the first hour of my day. It is a great way to wake up, and I have learned that if I wait until the afternoon, I can't get myself to sit down over the lure of a bike ride or afternoon hike.
In our daily "real world" lives, we don't necessarily want "fantasy" playing a role. While it would be cool to meet an alien or even get snatched up by a UFO — is that just me? — at the end of the day most of us would choose reality (albeit with a gin and tonic on the side).
With real estate, there was a time when just about anybody could buy just about anything. And we all know how that ended. It seems that today many buyers are a bit trepidation about jumping into real estate. Today, I'd like to dispel a few of the myths circling around and perhaps encourage those nervous buyers to dip a toe in. Let's start learning.
When I purchased my first property, a duplex down in Somersworth, I did so with virtually no money down. There was a 3 percent down payment program from Farmer's Home and a 4 percent credit from another program that was allowed to go towards closing costs. It was simply amazing.
Many buyers today have this (incorrect) assumption that it takes a 10 or 20 percent down payment to buy a home. The truth is, according to NAR (National Association of Realtors), the median down payment for first-time buyers last year was just 7 percent.
I had also only been in my job for about two years when I bought that first place. That is the second myth to dispel today, you don't have to have been in your job for 10 years just to qualify for a mortgage. The trend of millennials waiting longer to buy homes (and get married) is simply a decision based on lifestyle goals and, perhaps, financial objectives.
In reality, you can qualify for a mortgage and not need a decade of tenure at your current position. One of the factors that banks will look to is the actual "job" you do have and your earnings potential. Don't let this one stop you from making that phone call.
When I built my house over in Lincoln, I was carrying a few thousand dollars in credit card debt. I was quite worried that the bank would scoff at me when I went to get a loan. While the small debt certainly did not help anything, I was still able to move forward.
"Don't let a little lingering debt stop you from taking this amazing step into home ownership," said Badger Realty agent Deirdre Lorway. "Granted less is more in this department, but it is still worth a discussion."
Even if the bank tells you no, you at least now know where you stand and can take some strong steps towards hacking away at those credit cards. Be informed. It is the best first step.
Stand atop Mount Washington and sing "Single Ladies" by Beyoncé. It used to be that single women were less likely to buy a home than their male counterparts. Who knows if this was simply societal pressures or other factors at play. Anyone with a brain knows that women are equally able to own a home as men and the numbers, it would seem, are more telling than even that statement would imply.
According to NAR, single women homebuyers outnumbered single male homebuyers two to one in 2018. Heck, yeah! More important, you now have that song stuck in your head. You're welcome.
Once you decide to take the leap (or at least get yourself better educated about your options) you will quickly learn that there are loads of different mortgage options available to you.
Of course, your credit score, debt-to-income ratio and other financial factors will play a role here. The main take-away though is don't buy into the myth that all mortgages are 30-year fixed rate with no wiggle room. Talk to your mortgage professional and let them educate you on what is possible and available. I promise you, you will be surprised.
Lastly, I think it is important to remember that there are a myriad of ways to purchase a home. By that, I simply mean walking into a bank with a pillowcase full of cash and getting a traditional mortgage is by no means the only (or best) way.
I purchased the land (atop which I built my house) with a close friend who fronted the down payment. That way we could develop the land together and he got his return when we sold off one of the parcels. I'm currently looking at purchasing another home with a friend for the sole purpose of renting it out through any of the current short-term rental options available to us.
Home ownership, in this author's humble opinion, is still one of the best places to invest. As the saying goes, specifically of living in the White Mountains, they are not making any more land.
I encourage you to at least start asking the questions. The more you know, the more likely you are to find an option that is simply perfect for you, your budget and your timeline. Get asking.