Are you tired of hearing people, especially me, keep saying that NOW is an unprecedented time to purchase a new home? Don’t get mad at the messenger…. get mad at yourself if you don’t take action!
Buying a first home is a serious decision to make. After all, home ownership really isn’t for everyone. Before deciding to buy your first home, you’ve got to ask yourself some questions. Just don’t let people see you talking to yourself or they might think you’ve gone off the deep end!
1) Are you planning to reside in your new Nashville home for at least 2 years, if not longer? If so, lets go to the next question! If not, keep renting or enjoy living free with Mom and Dad.
2) Just how much of a monthly house payment can you comfortably afford? If you are currently renting and paying $700 or more each month, you can own a new Ole South home in Nashville for about the same monthly cost. Put some more payment money with that and the size and features of your new home can grow even more!
3) But can I qualify for a mortgage? Great question! The rules and guidelines are constantly changing, but if you have a steady job and are paying all of your bills timely, there is most likely a loan for you! A minimum 620 credit score is typically required for first-time buyers, and that number will be raised in the very near future. As a matter of fact, many lenders are already requiring 640 or higher.
4) How much house payment can I qualify for? Everyone’s financial situation is different, so there is no definite answer without knowing all of your information. For now, take your annual gross income (before taxes) and multiply that by .45. That is the amount of money you are typically allowed for annual debt payments, including your new home payment. Divide that number by 12. Subtract from that figure any monthly credit card minimums, car payments, or installment debt that you have. Don’t count your current rent, groceries, child care, utility bills, or party money…that’s already accounted for in the formula. After deducting those payments, the remainder is typically the monthly house payment a first-time buyer can be approved for, with little to no down-payment using THDA’s Great Start program for first-time buyers. (www.THDA.org)
Using the Great Start program, the State of Tennessee basically pays your required 3.5% down payment, and charges a slightly higher interest rate. If you would rather pay your own down-payment, it is possible to be approved with a higher debt ratio and also receive a lower interest rate. Consult a mortgage professional for a detailed analysis of your financing needs. I happen to have one to recommend, Chris Meagher or David Prince at Ole South Financial, 615.898.7152.
4) I am now comfortable with getting a loan aproval, so what is next? First off, please visit www.OleSouth.com for information on the many different neighborhoods you may choose to live. We have a decorated model home in most communities, so plan a visit at your earliest convenience! If you are working with an independent Realtor, please bring them along too! Our on-site new home specialists will be able to direct you to the perfect new home for your needs.
5) How much money do I have to have in order to purchase? All that is required to contract to purchase is an earnest money deposit, which is negotiable between buyers and sellers. At Ole South, we ask for a $500 deposit at the time of contract. You will be responsible for bringing the balance of your down-payment to closing when you are ready to get the keys to your new home! By the way, veterans and active-duty military are eligible for a VA loan, where no down-payment is required!
Although I am old (and fat too), I still remember buying my first home. I had no clue about anything and was very nervous to start the process. I am ashamed to admit that I actually could have, and should have, bought several years earlier than I did. I was just scared of the unknown.
There is really no need to be apprehensive, or afraid to start exploring purchasing your first home… especially now! I promise that I won’t go into the fact that interest rates are at a 59 year low and that inflation will soon kick-in. Let me just say with confidence that NOW truly is an unprecedented time to purchase a new home if the timing is right for you.
The best part of my job is being able to assist people in making the dream of home ownership a reality. I would love to discuss the possibilities with you as well! Please feel free to contact me anytime at 615.593.6340 or via email, TLewis@olesouth.com.
One last thing, wherever you decide to purchase, spend some quality time in that neighborhood before you buy. Not only will you learn more about your new area, but you’ll have more neighbors on hand to welcome you when you move in!
Have a great weekend! And remember…..
Trey Lewis is a licensed Real Estate Broker in the State of Tennessee with Ole South Realty, 615.896.0019 direct 615.593.6340. Specializing in new home sales in the Greater Nashville area to include Nashville, Murfreesboro, Smyrna, and Spring Hill, Tennessee.