Are you expecting a Tax refund this year?
It sounds unrealistic but yes, you can use your refund towards buying your house this year. Many of us do not believe that a tax refund is enough to help buy a house and as a result we end up spending it on other things such as a car, clothes, shoes or a nice vacation. All these are good to have but imagine investing it in a building. An investment that will gain value, one that will still be standing in many years to come. The reality is that your tax refund is the first step towards home ownership.
Government programs such as the FHA Loans for first time buyers will allow individuals to buy a house with as little as 3-5 percent down payment. That is not all, in North Carolina for example there are programs that will help with down payments for a house, organizations such as ncbond.org, nhfloan.org, nchfa.com are just some. For most people, the biggest hurdle for buying a house is saving up for a down payment.
If this has been your issue, the answer is as simple as these 5 steps. Once you have filed your 2016 taxes
1.Check your credit report. Sign up with one of the free services offered by companies like Credit Sesame Inc. or Credit Karma. If you use online banking, you should be able to get access to your free FICO score. This will give you good insight into any problems you might need to fix on your credit. It’s always good to know this information in case you want to make a big purchase.
2. Research all possible Down Payment Assistance programs in your state. Eligible borrowers can get Down Payment assistance from organizations such as nchfa.com, nhfloan.org, ncbond.org, if you need organizations close to you, simply do a search for “Down Payment assistance". These are a great resource to start with. The majority of people with low-moderate income are eligible for assistance.
3.Inquire about a mortgage from a Loan officer. I suggest speaking to a few lenders and shop around for some good rates. A good loan officer will assist you with enquiries and application for Down payment assistance programs (for example applications for assistance to nchfa.com can only be made by a loan officer and not by individuals directly.) So make sure to mention it to your loan officer. You will also be able to get an idea of how much you can get in assistance if you qualify. Get pre-qualified for a loan.
4.Estimate your Budget. You can estimate how much your housing expenses will be depending on how much you can afford to borrow. This is a good exercise, if you are currently renting, use that as a rough guide. Remember that your mortgage payment does not include other costs such as property taxes and HOA fees, but you can work out an estimate, just ask your loan officer or your Realtor. Assess whather you need to save more funds before you can buy.
5. Start House hunting. This is when all the fun starts. Once you have an idea of your budget, you can start looking at houses. This can be a lengthy process. If you are still saving, use this as an exercise to get a feel of what sort of home your budget will get you. When you are ready to buy, you will be able to act quickly.
If you are paying monthly rent towards your accommodation in 2017, you should consider buying a house. Paying towards your mortgage each month means you are building equity in your home. This is an investment that does not cost you any more each month.
Sharah Amani, 2017