By Teresa Bryce Bazemore, President, Radian Guaranty, Inc.
One of my biggest accomplishments was buying my first home—a condo in Columbia, Maryland.
My parents helped me with the down payment since I had been out of law school for only a couple of years. I got a Federal Housing Administration (FHA) loan with a nine percent interest rate. I was ecstatic!
Women began to outpace men in home buying in the late 1990s. According to the National Association of Realtors, in 2013, there were nearly twice as many single female versus single male first-time homebuyers (23 percent vs. 15 percent).
Demographic changes are helping to fuel the trend. In fact, 90 percent of current U.S. female homeowners define homeownership as essential to the American dream. However, experts say female home buyers share characteristics and concerns that set them apart from male buyers. Keep in mind these five tips when purchasing a home:
1. Take the plunge now.
Affordability conditions are favorable. The interest rates are still low and there are a lot of options available. I often hear first-time homebuyers stretching themselves to the limit to build savings for their dream home. Remember that as your income and your savings rise, you can move up to a more expensive home.
2. Keep it simple—at least at the start.
My advice is to not stretch yourself to the limit. With a good credit rating and other favorable factors, you may get approved for a home mortgage that—combined with other debts and commitments—may take up one-third or more of your gross pay. While you may be able to afford it, you don’t want to be house poor. You want to own this home and have the freedom to enjoy other things.
3. Know your credit rating.
Mortgage lenders have become stricter than ever post-recession. Make sure your credit is in tip-top shape to get approved.
4. Do your homework.
Don’t get intimated if at first you don’t fully understand something. Home buying can get tricky and you may not be familiar with a lot of terminology and concepts. So ask lots of questions. If you aren’t armed with the right information, your finances may be hurt.
5. Explore all options:
I wish my loan officer had told me about private mortgage insurance (MI), which is the private sector alternative to FHA. With both programs, homebuyers pay insurance premiums to purchase a home with less than 20 percent down. However, for qualifying borrowers with credit scores of 620 or higher and a 5 percent down payment, your premiums can be lower with an MI-insured loan. To learn more, visit www.achievethedream.com.