First-Time Home Buyer in Roscoe Village: 14 Things to Know

First-Time Home Buyer in Roscoe Village: 14 Things to Know

  • KD Homes
  • 10/20/23

Buying a home is one of the most significant decisions in a person's life. It’s also relatively common, with first-time homebuyers comprising about 30% of all homebuyers. For first-time homebuyers in the charming neighborhood of Roscoe Village, the process can feel both exhilarating and overwhelming. Thankfully, there are tested ways to make the bold move toward homeownership a fruitful and worthwhile experience. Read on to learn more about buying a house in Roscoe Village, courtesy of KD Homes.

Facts about first-time homebuyers

In the recent past, 2021 witnessed a rise in first-time homebuyers to 34% from 31% in the preceding year. It's worth noting that most first-time buyers are around age 33. The allure of owning a personal space is strong, with 65% of buyers primarily motivated by this desire. And since 2018, first-time homebuyers have been making an average down payment within the 6% to 7% range.

Financial challenges exist, and 29% of these buyers find “setting aside funds for a down payment” as the steepest hill to climb. To ease this burden, 28% of first-time buyers in 2021 received gifts or loans from relatives or friends to boost their down payment. Debt, particularly student loan debt, stands as a barricade for 49% of younger millennials and 44% of older millennials when it comes to saving for a home. In the bid to buy homes, both younger and older millennials (between 23 and 41) frequently reduced luxury or non-essential expenses.

Mortgage denials for this age group are primarily attributed to insufficient debt-to-income ratios and poor credit scores. Interestingly, only a minor 11% of both age groups initiated their home-buying process by reaching out to a bank or mortgage lender. The majority kick-started their journey by scouting online listings.

Ensure you're prepared for a loan commitment

Taking on a loan is a significant decision that binds you to years, if not decades, of financial commitment. It's vital to evaluate your financial situation and long-term goals thoroughly. Ensure that you're in a stable position, both emotionally and financially, to make such a commitment. Remember, loans come with responsibilities, and being prepared can save you from future heartaches and financial strain.

Never underestimate the value of preapproval

Jumping into the home-buying process without preapproval is like setting off on a journey without a map. A preapproval shows sellers that you're serious and gives you a clear understanding of what you can afford. This knowledge can be empowering and will allow you to house hunt with confidence and clarity.

Keep an eye on your credit score

Your credit isn't just a number; it reflects your financial trustworthiness. Maintaining good credit is crucial when applying for a mortgage. Regularly monitor your credit report and promptly address any discrepancies. Good credit can unlock better loan terms, saving you money in the long run.

Prioritize saving for a down payment

While the excitement of buying a new home can be overwhelming, don't underestimate the importance of a substantial down payment. The more you can put down initially, the less you'll owe over time. A sizable down payment can also result in lower monthly payments and better loan terms.

Familiarize yourself with different loan types

There's no one-size-fits-all when it comes to mortgages. From fixed-rate to adjustable-rate and more, the options can be dizzying. Take the time to educate yourself about the pros and cons of each, and consider consulting with a mortgage professional. Choosing the right loan can have lasting financial implications, so making an informed decision is crucial.

Factor in the closing costs

When budgeting for a home, many people forget about closing costs. These fees can add up, and unpreparedness can lead to unwanted financial stress. Always account for these additional expenses in your home-buying budget.

Identify your must-haves and desires

It's essential to distinguish between what you need in a home, what you can't compromise on, and what would be a nice bonus. This clarity can streamline your house-hunting process and prevent you from becoming sidetracked by properties that don't align with your goals.

Collaborate with a trusted real estate agent

Navigating the real estate market can be complex. Having a professional by your side can make a world of difference. Real estate agents can provide invaluable insights, negotiate on your behalf, and help steer you toward properties that fit your criteria.

Approach offers with confidence

When you find that perfect home, approach the offer process confidently. Your research, preparation, and preapproval will all come into play here. Making a confident offer can position you favorably in the eyes of the seller.

Invest in a professional inspection

No home is perfect, but some issues can be deal-breakers. Hiring a professional inspector can help identify potential problems that might be overlooked. This step not only safeguards your investment but also provides peace of mind.

Stay true to your financial limits

It's easy to get swept up in the emotion of house hunting. However, remember to stick to your budget. Overextending financially can lead to regret and strain. Keep your long-term financial health in mind and resist the temptation to overspend.

Retain hard copies of all documents

In our digital age, paper can seem archaic. But when it comes to such a significant investment as a home, having physical copies of essential documents can be invaluable. Store them in a safe place for easy access and reference.

Embrace continuous learning

The world of real estate is ever-evolving. Even after you've purchased your home, continue to educate yourself about market trends, home maintenance, and financial strategies. Knowledge is empowering, and staying informed can benefit you in countless ways.

A closer look at first-time homebuyer programs

As a first-time homebuyer, you have several options for financing the purchase. Here are four categories of mortgages.

Traditional mortgage options

Conventional loans have consistently been the beacon of hope for many aspiring homeowners. Their allure primarily stems from their flexibility. Imagine being able to walk into your dream home, knowing fully well that your monthly payments won't be a guillotine hanging over your head. That's the kind of assurance conventional loans offer. The fact that these loans have the potential for lower monthly payments (especially when you've managed a substantial down payment) makes the dream of homeownership feel tangibly within reach. Every payment made feels like a step closer to fully claiming a piece of the world as your own.

Options for veterans

Our brave men and women in uniform deserve more than just medals and parades. Their sacrifices, the nights they've spent away from families, the moments they've missed—all in the service of their nation. Recognizing this, the Veterans Affairs Department offers VA loans as a token of gratitude. These loans come with terms that are beneficial and honor the spirit of service. They cater specifically to those who have donned the uniform — whether currently serving, veterans, or certain family members.

Assistance through the Federal Housing Administration

Taking that first step onto the property ladder can be daunting. The financial implications, the commitments — it's a whirlwind. FHA loans, like a guiding hand, make the journey slightly less intimidating. With the backing of the Federal Housing Administration, these loans have been crafted with the first-time homebuyer in mind. The highlight? Their compassionate approach to down payments. The reduced requirements ensure that more people can transition from dreamers to homeowners. It's like having a trusted friend, in the form of a loan, telling you, "You can do this. You can have a place to call your own."

Rural and suburban home buyer aids

Away from the bustling city streets, in the heartland of the country, dreams grow amidst green fields and open skies. But rural and certain suburban home buyers often feel left behind in the race to homeownership. Enter USDA loans — a beacon of hope. Tailored to bring dreams to fruition, these loans offer tantalizingly competitive interest rates and understanding down payment terms. They stand as a testament that no matter where you plant your roots, there's a helping hand waiting to guide you home.

About KD Homes

KD Homes, the brainchild of Kimber Galvin and Drew Westergreen, is a product of passion, local roots, and an intrinsic connection to real estate. If you're navigating the Roscoe Village real estate landscape or have any inquiries, the friendly team at KD Homes awaits your call. They're more than equipped to help you find or sell your dream space.

*Header photo courtesy of Shutterstock

Work With Us

Kimber Galvin and Drew Westergreen, the partners and founders of KD Homes are a sister team who share a passion for helping clients achieve their real estate goals and who pride themselves on delivering the highest level of customer service.Their skill set, tireless work ethic, and result-oriented approach to real estate has earned them a respectable place among Chicago’s top-rated brokers.

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