Buying a house is one of the biggest decisions and commitments a person can make in their life.
To ease the fear, stress and frustration of the process, six organizations came together to offer their best advice during a homebuyer’s seminar hosted by First National Bank Thursday at Southwestern Community College.
Real Estate Broker Retta Ripperger of R Realty said buyers should move quickly if they are interested in a residential property in Creston.
“As a buyer, you may have looked at a home yesterday and thought, ‘I’m going to think about this a little bit,’ but, by the time you decide to make an offer, the house is gone,” Ripperger said.
According to Bluegrass Multiple Service Listing, which Ripperger said features home listings of every real estate agent in Creston, only 72 houses were available for sale in Creston as of last week.
To give you an idea of Creston’s current home selection, 33 percent of the homes for sale are in the $20,000-$50,000 range, 31 percent are in the $50,000-$80,000 range, 15 percent are in the $800,000-$100,000 range, 10 percent are within the $100,000 to $120,000 range, and 10 percent of houses for sale in Creston are more than $120,000.
With so few houses in Creston, Ripperger said it’s more common to see multiple offers made on the same property.
“Our choices as a buyer are down,” Ripperger said. “You might have to compromise what you are looking for.”
Know your price
The first step to purchasing a house is not contacting a realtor, but to meet with a home loan officer to determine your purchasing power.
“The main things we look for are how much you can afford and what is your credit score,” said Paul Lorenz, vice president at First National Bank in Creston.
Gaining pre-approval for a home loan saves home buyers the grief of looking at houses they can’t afford, and places them in a better position to make a serious offer when they discover the right house.
“I think most realtors request that (pre-approval letter),” said Lorenz.
For individuals wishing to qualify for a home loan, Lorenz said, First National Bank requires a government issued I.D., paystubs for the previous two months and income tax returns for the previous two years.
If you don’t know what kind of home loan you are looking for — whether an adjustable rate mortgage, fixed-rate loan, Federal Housing Administration (FHA) loan or Iowa Finance Authority Rural Development loan — a home loan officer is the best place to start.
“Each person’s situation is different,” Lorenz said. “What is right for one person is not necessarily right for another.”
Visiting with a home loan officer is also a good way to learn of other home buying resources in Creston.
Judy Brimm, finance director of Southern Iowa Council of Governments (SICOG) shared information on a housing revolving loan fund (H-RLF) administered by SICOG, and the Southern Iowa COG Housing Trust Fund.
The purpose of H-RLF is to help low-to-moderate income earners afford a down payment on a house.
SICOG’s H-RLF program lends up to $5,000 to qualifying home buyers. However, the loan must be matched dollar for dollar by the borrower, and paid back over a period of seven years at 2 percent interest.
Additional financial assistance is available for veterans through the U. S. Department of Veterans Affairs. SICOG also offers a forgiveable loan for new, first-time home buying teachers through a program called Providing Assistance for Teacher Housing (PATH). New construction homes built by Union County Habitat for Humanity volunteers are also available for purchase for qualified buyers, who earn a lower income.
“So many people think, ‘I don’t qualify,’ but, that’s not the case,” Ripperger said.
Benefits of home ownership
Lorenz said one of the main benefits of purchasing a home over renting is to control costs.
“You can not control your rent payment, but, you may be able to avoid increases in your monthly payment (for a mortgage),” Lorenz said.
Additionally, interest paid may be tax deductible and home owners have the ability to build equity. As a house is paid down and value increases on a house, the difference of the two, known as equity, gives the homeowner more purchasing power for future investments and lines of credit.
To begin your home buying journey and learn the full scope involved in purchasing a house, contact your local bank for details.