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First Time Home Buyer Program2021-08-11T20:12:07+00:00

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Down Payment Assistance for First Time Home Buyers

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WHY BUY A HOUSE?

Stop wasting money renting and househacking. By renting from someone else, you’re effectively paying their mortgage and building their equity. After a year of renting you have nothing to show for your hard-earned money. Take that same money and give it back to yourself by buying your own home, condo, duplex, anything!

Think of buying real estate as paying into a savings account. There are several investment strategies where tenants can pay some or all of your mortgage, meaning that other people are building your equity therefore increasing your net worth for you.

Real estate doesn’t fluctuate as quickly as the stock market can and people (renters) will always need a place to live. Holding a property as a rental is a stable asset that will appreciate over time and you can always sell or use a HELOC if you ever need money to put towards other life expenses.

PREPARING FOR THE HOME BUYING PROCESS

If you’re not buying a property with cash, you’re going to need a loan. Rates differ based on credit score, loan type, and other factors. Some loan programs are lower rates with higher down payments, others offer lower rates if you meet a credit score minimum. Some states also have more loan programs than other states, and these may be allocated based on criteria unique to that state’s programs. A loan officer is there to help you navigate the loan process. They will identify the best rates and terms for you and explain them so that you’re confident in your decision. Be sure to ask questions throughout the process. Everyone should be ready, willing, and able to explain their role in your transaction.
Agents or Brokers are professional negotiators who see hundreds of contracts a year. Our job is to protect you as the buyer when you enter into a transaction. We are well versed in the documentation and legal processes associated with buying real estate and it is our duty to make sure that you don’t lose your earnest money. Real estate agents are there to ensure you have a smooth transaction. Agents are required to be licensed with the state and are required to renew that license every two years. Be sure to ask questions throughout the process. Good questions include: How do you get paid? What’s your availability? How will I contact you? What are some common pitfalls that you see other buyers fall into? What can we do to avoid those? Why should I work with you as opposed to another real estate agent?
A loan officer is there to help you navigate the loan process. They will identify the best rates and terms for you and explain them so that you’re confident in your decision. Be sure to ask questions throughout the process. Good questions include: How do you get paid? What’s your availability? How will I contact you? What are some common pitfalls that you see other buyers fall into? What can we do to avoid those? Why should I work with you as opposed to another loan officer?
Make sure to understand how to find the right buy box for you. In addition, as your agent and lender questions to further build your confidence. Some questions could include: What experience do you have working with investors? Can I see a few of your past deals that have worked well for clients? What kinds of data can you provide me with? How familiar are you with my market? What trends are you seeing right now that I should be aware of?

FINDING THE HOME FOR YOU

Everybody wants the perfect investment property that’s turnkey ready, with high cash flow, great resale value, in the perfect neighborhood, and all with low money down. That is a unicorn deal, it doesn’t exist. The elements of a buy box can usually be broken down into investment strategy, property type, rehab type, financing options and some other minor factors. Knowing how these factors apply for you will help you keep from waiting for a deal that won’t appear, or getting paralysis from analysis by casting too wide of a net.

Financing choices often narrow your buy-box the most. It’s important to talk with your lender about this and your real estate agent. Knowing your financial capacity is important. All parties knowing what financing options are possible or best for the buyer help for an efficient searching process and less stressful closing process.
Moving forward with contracts on a transaction is often where people get cold feet because it’s where the rubber meets the road; where being in love with the idea of real estate investing turns into starting your real estate investment journey. Understanding the jargon and different structures of contracts before you start submitting offers is the best way to combat getting cold feet. Check out our contract videos to learn more!

REPEATING THE PROCESS

Iteration is the most important piece of real estate investing. Repeating the investment process is taking numerous different real estate related paths to financial freedom. At the very least, in your first deal you got out the kinks, now it’s time to do it again!
At some point you’ll have the financial means, or the confidence in yourself to upgrade your house hack. This could be done through a multitude of options like purchasing a bigger property, finding a higher rent market, buy higher ARV property, shift to a multi-family strategy. All of these options will either increase cash flow while holding a property, or profit after you sell. Our FTHB agents can help guide you in the right direction.
This housing type is often seen as the best for anyone who has the cash to secure it. It allows an owner to space out the rehab of different units, they can easily rent out their space to tenants they don’t have to interact with often and as a bonus multi-family properties often have the strongest cash flow. If you’re looking to purchase anything over 4 units, reach out to Jenn Haffner, our commercial multi-family specialist.
Typically what is seen as real estate investing, fix and flips require the most cash on hands, but if you’re surrounded by a good team of contractors, lenders and brokers, this can be a quick hands off process to make a lot of money. Check out our team of acquisition brokers if you’re interested in doing a fix and flip next!

Buying a House?

We’re here to help! View our most frequently asked questions about buying a home for the first time!

Complete FAQ
Worried about having enough money for your down payment?2021-02-05T20:37:40+00:00

If you’re a first time home buyer in Washington you can use a Washington State Bond program like the Home Advantage or House Key Opportunity programs through the Washington State Housing and Finance Commission in order to get down payment assistance for your purchase. This is a great way to get started on your first property. If you combine one of these programs with the Energy Spark program you can save up to 0.25% on your interest rate for buying a green home or making the home you buy more energy efficient. To qualify for these programs, you must: Attend a First Time Home Buyer Education Seminar, Be under the income limit of $145,000, Have a credit score above 620, These seminars are free to attend, and the certification is good for 2 years. We partner with Caliber to teach these classes and get you ready to buy your first house as an investment. If you’re thinking about house hacking or just getting out of renting, these are the best ways to get into a deal with minimal cash out of pocket and maximum cash on cash return. If you’re coming from Bigger Pockets and wanting to do the BRRRR strategy – buy, rehab, rent, refinance, repeat – this is a great way to get started. We will work with you to find the property that’s right for you with the best return. You can check out James Dainard’s Bigger Pockets episode here: https://www.biggerpockets.com/blog/biggerpockets-podcast-338-james-dainard

BRRRing in the Seattle area can be challenging due to pricing in this area. That being said, there are plenty of ways to make a great deal. Our brokerage specializes in front end analysis so that you can be confident in your purchase. We’ll provide you with all the data you need in order to execute on your investment goals. Here’re some examples of the things you can expect from us before you purchase a property: Rental comps, Sale comps, Rehab budget, Vendor list, Property Proforma, ARV. Contact us by filling out the form above to see if this is the right program for you.

How much do you need for a down payment?2021-02-05T20:33:25+00:00

Down payments typically range from 3.5% to 5% on an owner-occupied property. If you’re using an FHA or conventional loan. Discover which might be better for you. In order to figure out which loan is going to be the best for your situation you’ll need to talk with your lender. You’ll need at least a 620 credit score to qualify. If your credit score is above 740 you have a good chance at qualifying for a better rate. Find out more about how you can increase your credit score and improve your chances of qualifying. If you’re already working with a lender, they’ll be able to give you an estimate of how much you’ll qualify for based on your income and how much you’ll need to bring to the table at closing. If you’re still looking for a lender, check out our buying guide for more information on finding a lender.

How do loan officers and real estate agents make their money?2021-02-05T20:32:48+00:00

Both loan officers and real estate agents only make money when you decide to purchase a house with them. For this reason, it is very important that you decide who you are going to work with early on in the home-buying process. You want people who will be your trusted advisers so make sure you interview multiple people and get a good sense who the pros and cons of each person.

What if I have bad credit?2021-02-05T20:32:06+00:00

There are plenty of things that you can do to improve your credit score. The biggest thing is paying on time. If you’re having trouble making payments on time talk to your loan officer or a credit repair agency to see how they can help. They can make suggestions and help you budget to stay on track. It might take some time but it’ll be worth the effort.

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