Best Advice for Becoming a Homeowner in the USA
When immigrants look for housing in the United States, they are faced with two options:
- Buying a place.
- Renting a place.
If you don’t have the funds to buy a place to live in the United States, you want to consider renting.
We have plenty of information about Best Ways to Rent in the United States here.
Today we are going to cover the subject of buying a place in the US and the best ways to become a homeowner in this country.
Do Your Math!
First and foremost, you got to do the math. Is it worth buying versus renting?
In cities where renting is expensive, the answer is most likely YES!
Renting in most major cities in the US is so expensive that buying makes a lot of sense.
Your mortgage will be likely the same (or even slightly lower) than your cost of renting a place, depending on the interest rate.
However, you must have savings in your account to make that happen.
The good news is, there are plenty of “First Time Home Buyer” programs that offer financial relief to make it happen for you.
We will talk about this a little later in our post.
Here is what you need to consider when buying a place in the USA:
1. Have enough Savings in your Bank Account
If you would like to buy a property in America, you should be prepared to have anywhere between 3% to 20% of the home’s value saved in your Bank Account.
3 percent may seem low but it is possible if local programs are available (we will talk about this in Point 3 below).
Having stacks of cash is not a good idea.
Mortgage banks want to see where that money is coming from, so keep it in the bank whenever possible.
2. The Importance of Credit in the Buying Process
Now we are back to the good old Credit subject.
If you want to know the best ways to build your credit in America fast, read more here.
The better your credit score, the lower your interest rate. The lower your interest rate, the lower your monthly payments.
See what we are trying to tell you?
It is super important to have good credit before you start the buying process.
Don’t know exactly what a good credit means or looks like? Check it out here.
If you have bad credit, your mortgage lender or Bank Representatives can give you great tips on how to improve it based on your individual situation.
Some Banks even have little flyers they can hand out to you to help you fix issues with your Credit Score before buying a property.
3. Research any Local or State Programs that can Help you become a Homeowner
The United States is great about making Home Ownership possible.
Unlike some other countries, the US has a low down-payment requirement and plenty of resources that lower your down-payment to 3-5 percent of the home’s value.
Research “First Time Home Buyer” programs in the State you live in.
Great News: You don’t have to be a US Citizen to qualify for these programs!
Be aware of scammy and unofficial websites when you do your research!
A great start is to start reading on websites such as HUD/FHA.
HUD has a search engine where you can locate any programs in your State, you can start your easy search right here!
Please note: Not all banks work with these programs! If there is a program that you want to apply for, you need to find a Bank that accepts it!
You can find eligible Lenders on the HUD website right here.
Also, if you are in the US military or a spouse of a US Veteran, you may qualify for VA Loans that don’t require any down-payment at all!
This is a big winner if you are eligible, so feel free to check out this option on their official website here.
No matter what your situation is or where you are located: Make sure you research any other State specific options that may be out there for you!
4. Do your Research on the potential Area
Once you got your financials prepared and are in touch with a great realtor, you need to research the areas you want to live in.
You should look at the following before making a decision:
- Crime Rate in the Neighborhood
- School District Rating
- “Walkability” of the Neighborhood (if walking, biking, etc. is important for you).
- Accessibility to highways, stores, gas stations, etc.
- Accessibility to Public Transportation.
Pay close attention to what is important to you.
You likely do not want to live in neighborhoods with high crime rates.
This is not only dangerous but also drives down the value of your property.
That’s why it is important to research different neighborhoods before you tell your realtor where you are looking for properties.
5. Buy a Place that has the Potential to Go Up in Value
Let’s make this simple: Don’t buy a property that is overpriced and has no potential in going up in value.
Worst case scenario, you even lose value once the market balances itself out.
It is best to look for a “great deal” that you can negotiate below or right at the property value.
If this isn’t possible, buy a property that meets the value of the property and has the potential to go up in value.
For example, a property that is near new developments (new housing, shopping centers, etc.).
Your realtor should be able to help you with this!
6. Consider Going through a Mortgage Broker to Compare Prices
You can go to different banks individually and ask them to give you an example of what your monthly mortgage would look like (based on your credit score, income, down-payment, etc.).
Have them print the examples (including your interest rate options) so you can compare it with the examples of other banks you talked to.
You can also hire a Mortgage Broker who will do all the work for you and get you the best rate.
This is a convenient option, but they make an earning off of you!
Make sure you ask them about the cost of their services!
7. Find a Realtor with great Social and Negotiation Skills
Finding a great realtor is very important.
Ask a lot of questions to test their knowledge and experience.
You need someone that is motivated and acts fast!
Outstanding realtors give you a lot of information (verbally and in writing, such as documents to compare properties, fact sheets, etc.).
They also take the time to really explain the process to you.
If the housing market is hot, you need a realtor that is available within 24 hours to show you the property.
If they let you wait for multiple days because they are too busy, you may want to find a new realtor.
Your realtor should also have great negotiation skills that can save you a lot of money!
If your realtor seems too shy or inexperienced, you may want to look elsewhere!
8. Look at multiple Properties before Making a Decision
Some people get very excited and want to submit an offer after looking at one property. Don’t make that mistake.
If you love the place you may be tempted but you need to compare before making such a big decision!
It is not impossible, but the first choice is rarely the best one!
So make sure you look at multiple properties before making a decision.
Once you follow these steps you will likely set yourself up for success!
We hope you find this helpful!
Please let us know if we are missing anything that should be added to our list of important steps!
Want to share your experience of buying a property in the United States?
If so, we would be excited if you send us a message HERE or tag us on Facebook and Instagram.
Cheers,
Your Integr8 USA Team ?
Check out more articles about Housing in the USA here:
General Housing Information you Need to Know