Thinking it’s time to buy your first home? You’re in good company! The National Association of REALTORS® says our local market is one of the top ten areas in the country for first time homebuyers.
Why settle here?
To start with, our local economy in Minnesota and western Wisconsin is almost unbeatable. The unemployment rate of the Twin Cities metro and surrounding areas is the lowest in the nation due to incredible growth in the public and professional sectors. This newfound stability is especially important for Millennials (aged 20 - 34), who during the height of the recession could barely afford to pay their student loans, much less save for a down payment.
Why buy now?
Delaying homeownership after the bubble burst was seen as a responsible choice, but experts now agree that buying beats renting both nationally and in our market area.
How is that possible? Well, home prices are still historically low, while rental prices continue to break records. Also, rumors of rising mortgage rates have continued to be just that — and the above report shows that until rates hit 10.6%, buying will continue to be a better financial bet than renting.
What help is available?
Inventory is growing, but there is still a shortage of homes for sale in our local area. Buyers purchasing “fixer uppers” will not only have more property options, they may also be able to offset renovation costs with an FHA 203k loan.
Let’s walk through a case of where a 203k loan could benefit you. Perhaps you find a charming starter home in northeast Minneapolis. It’s the perfect biking distance to all your favorite haunts and in your price range — but the kitchen hasn’t been updated since 1965 and the bathroom has some plumbing problems. By working with an FHA 203k lender, you may be able to secure a loan for the full mortgage (less a minimum 3.5 percent down payment), plus the funds needed to renovate the kitchen and bathroom. Additionally, you may be able to obtain a “contingency reserve” — an emergency fund you can dip into if the project goes over budget.
Remember, a unique set of lending conditions comes with every homebuyer and home. While 203k loans are a great option for some first time buyers, it’s important to work with a Realtor you trust, and a lender who will walk you through your best option.
Still not sure if it’s the right time?
The first step to buying a home is getting pre-qualified. In pre-qualification, you get an estimate of the mortgage amount a lender would be likely to approve. There’s nothing more exciting than searching for homes that could someday be yours. Reach out today to take the first step to homeownership.
