According to recent research, 8 out of 10 Americans say that buying a home is a priority for them. It is estimated that approximately 28 million Americans plan to purchase a home within the next year. However, only a fraction of those will achieve the goal for various reasons. Our Knoxville home buyers guide aims to give some helpful tips to may your dreams of homeownership a reality.
Save for Your Down Payment
When asked what was preventing them from following their dreams of homeownership, 34% of adults said that they don’t have enough savings to put towards a down payment. That’s why the first top in our Knoxville home buyers guide is to start saving for a down payment as soon as possible. For those who may not be aware, a down payment is a lump sum that you pay upfront to serve as a deposit. In most cases, the remaining balance of the agreed purchase price is then covered by taking out a home loan, also known as a mortgage. The big question is, how much will you need to save?
There is a common misconception that you need to put down 20% of the overall purchase price as your down payment. However, that is not always true. The National Association of Realtors states that the current median down payment is 14% and can be as little as 6% for first-time buyers! Even if you think you cannot save enough, our Knoxville home buyers guide suggests that you try to save whatever you can because you may be able to get help from assistance programs or find a lender with a lower minimum down payment requirement. It is worth considering FHA, USDA, and VA loans if you are eligible, as many require little to no down payment.
Work On Improving Your Credit Score
The next item we want to discuss as part of our Knoxville home buyers guide is your credit score! Everyone has a credit score - a number determined by various factors that indicate how financially stable you are. If you are going to be applying for a home loan in order to purchase your home in Knoxville, lenders will be looking for a decent credit score. The higher your score, the more reliable lenders believe you are, and they will be willing to lend larger sums to you at more attractive interest rates. Unfortunately, around 30% of aspiring homeowners say their credit score stops them from getting a home loan.
If your credit score is lower than you would like it to be, all is not lost. You can take steps to improve your credit score, but it is important to note that it takes time to improve your score. It’s not something that you can repair overnight. There are many different things you can do to help improve your credit score, but two of the easiest to work on are:
- Pay Bills On Time - Lenders are essentially just looking for an indication that you will make your loan repayments when you are supposed to! That’s why paying your bills on time is such a big part of your credit score. If you miss a payment, it puts a mark on your credit score. If you have a forgetful streak, why not set up most of your bills on auto-pay so you never miss your payments?
- Use a Variety of Credit - Another less well-known tip to boost your credit score is to have various types of credit. For example, it is better to have a mix of credit cards, auto loans, and store cards instead of racking up 4 or 5 different credit cards!
Work With a Local Real Estate Agent in Knoxville
Perhaps the most important piece of advice in our Knoxville home buyers guide is to choose a local real estate agent to work with when buying your home. This is going to be a substantial transaction. It’s likely to be your biggest purchase. You need to know that the realtor you choose to guide you through the process is someone trustworthy and knowledgeable. Our Knoxville home buyers guide recommends that you choose a local realtor since they are going to have a more intimate knowledge of the area. They will be able to help you choose the best neighborhood to suit your needs and offer advice about local services and amenities. If you decide to work with Wright Realty, you will also be able to enjoy a wholistic approach to real estate. We can connect you with trusted professionals in all areas of real estate. Whether you need help with Titles, home inspections, legal services, or more, we are happy to make introductions to the professionals in our extensive network.
Wright Realty is a full-service real estate concierge with a wholistic approach to buying and selling property in East Tennessee. We are your trusted advisor and keep open communication throughout your entire buying/selling process. Real Estate done "Wright" means more than just a 'transaction'.
Finding Your Property the "Wright" Way!