maybe we should make a seperate thread on this, but I have bought property three times including most recently in december 2015.
that being said, buying a property really isn't as intimidating as you might think.
folks think they have to have stellar credit, but that isn't true either.
If you were in the military you can get a VA loan which will allow you to buy a house pretty much with no downpayment. If you're a regular joe, you can get an FHA loan (which is backed by the government) that allows you to purchase a home with as little as 3.5% down. and in that instance, you can qualify for grants as a first time homebuyer which will provide you with downpayment assistance. There are also conventional loans where you have to put down at least 5% down, and that loan is backed by a bank.
that being said, if you're a first time buyer, I'd look into the FHA. they only require a 530 min credit score to qualify, and it requires you to put down less downpayment. most black people don't have 20% cash to put down on a house and that's fine. just remember, when you put down less than 20% on a house, you have to pay mortgage insurance because of the lack of equity in your home. in my opinion, if you can't afford to put down the full 20%, then I'd try to put down the least amount of down payment that way you can preserve your cash.
as for the process this is what you do:
- contact your bank or other banks, credit unions and get preapproved for a loan. they're just gonna wanna know how much you make, pull ur credit, and see what type of debts you have like car payments and credit cards and what not.
- once preapproved for a loan, you get a realtor and they can start taking you to look at cribs based on your criteria and budget. as a buyer, you don't have to pay jack shyt for the realtor. they get paid their commision once the house u wanna buy closes from the seller.
- once you find a crib you want, you put in an offer which includes the terms like what you wanna pay, and if you want them to pay closing cost or do any other minor things. just get that in writing. the house I just bought didn't have shelving in the closets, but I put it in writing on the contract just to make sure they put it in. when the seller accepts ur contract, you typically give them a couple thousand in "earnest" money. that is money used as a deposit to let them know you ain't bullshytting. if the deal falls thru, you will get it back tho.
- if the seller accepts or counter offers you and you finally agree, you then set up a few things. you want to pay to have a home inspector come and make sure everything is on the up and up. you also have to pay to have an appraisal done for the bank. the bank wants to make sure that the house is worth more or equal to the amount that they are loaning u for a mortgage.
- from there, you will pretty much be working with your lender. make sure you get them bank statements and pay stubs to make sure your financing is good. once your lender sends ur loan and your documents to underwriting, you will get a clear to close on a certain date.
- at the closing, this is where you get your keys. and this is where you NEED a lawyer. you will be signing a million documents at the closing, which is at a title company, and your lawyer will explain EACH document for you so you know EXACTLY what your signing. your lender will also give you statements before the closing which tells you how much money you will need to pay at the closing. for me, my lender fukked it up and we almost weren't able to close because he was off by almost $3000, and I didn't bring a cashier's check for that amount. I was FURIOUS and almost went apeshyt that day after that happened. anyways, the lawyer fee can be included in the closing cost, so you technically don't have to write them a check. once all the documents are signed, and the bank wires the title company the money, and EVERYONE is paid, then you will get the keys to your new house/condo/townhouse.
that's basically it tho in a nutshell. I started looking in mid september, and I was moved by mid december, so the entire process took about 90 days total. I have been trying to encourage my friends who are renting to consider buying because it's cheaper to own than rent IMO. plus you get tax benefits, plus you're building equity. I have a friend who rents a house for like $100 less than what I'm paying a month, except I have a full back yard, a deck, 2 car garage, and my house is twice as large as his with a finished basement, and is totally updated and new.
