My name is Karina and I moved here from California a little over a year ago with the intention of being closer to family, seeking a career that would fulfill the whole reason I went to school, and buying a home. My dad was against me moving so far away, but I was persistent in letting him know I was leaving California to buy a home, which would have been close to impossible to do in a state like California. I chose to buy a home in Minnesota over purchasing a home in sunny California because I could live comfortably in Minnesota versus living paycheck to paycheck with a mortgage impossible to afford in California. Buying a home there would have had me chained to a high house payment and no life.
Four months after I arrived in Minnesota my boyfriend and I purchased our first home! It was AMAZING!!! It all happened so fast. A small question about a home loan turned into taking tours of homes that we were interested in, and the next thing we knew we were signing a purchase agreement. I had good credit, better than I expected, thanks to my mom who ingrained in me how important it was to pay my credit cards on time, and always pay more than the minimum payment. I never understood how important this was until now.
We had finally picked out a home and completed a purchase agreement, when my boss mentioned to me the loan program that the housing department of Three Rivers Community Action, Inc. offered for first time home buyers. I immediately approached Jenny Larson from Three Rivers to explain more about this loan. Jenny worked with some numbers and we qualified for a 0% interest deferred loan. This meant we wouldn’t be paying any interest on this loan but would rather have to pay it back when selling the house. It was a major relief for me to know we now had this extra money to assist us with our closing costs. This down payment loan program could be used toward the closing cost and down payment, which lowered our monthly mortgage payment. Without having received this assistance, our payments would have been much higher and we would have had to have come up with the closing cost expenses, which we didn’t have. I am grateful for having received this loan that has helped us out tremendously.
In order to qualify for this loan program, I needed to take a Home Stretch 8 hour class which covered all the processes of my purchase. This class really helped me understand and answer so many of the questions and frustrations I had about the closing costs and setting up the escrows, how credit works, setting up a budget, understanding the role of the lender realtor, appraisal, home inspector and etc. It was a great class which helped become a more qualified homeowner!!
We absolutely love our home, our quiet neighborhood, and we’re proud to call it our own. Owning a home is absolutely a dream come true, I just never expected it to be so soon.
If you could advise others, what are the three most important things to do before purchasing a home?
Budgeting: Know your finances; what can you afford? Know your monthly expenditures is important so you can have an idea what your budget is going to be like when you have a monthly mortgage payment.
Research: Look into the options you may have as a first time home buyer, we had no idea these things existed. Look at a lot of homes. Don’t settle for the first one you look at. Walk through many homes and compare them. This was important for me.
Looking around homes in the neighborhood and talk to the neighbors, this may give you a better idea as to what the neighborhood is generally like. Paying attention to neighbor’s lawns, their homes, and the cleanliness of the neighborhood. If you have children you may want to consider living near schools, parks or trails. While looking for our home, one of the things we always thought about was staying away from living on a busy street. We wanted to stay away from traffic and wanted to make sure it was a safe and quiet neighborhood. You may also want to ask yourself if the home you’re interested in may need a lot of repairs after it’s bought. We knew we didn’t want purchase a home that was going to require a lot of work because we knew we weren’t going to be able to afford it.
The home inspection is very important!! It’s important to have someone trained to make sure your home is safe and in good condition. Home inspectors are there to let you know if anything is in need of repair or is unsafe. You don’t want any big surprises after you purchase your home.
Loan Programs: Know what kind of loan you’re getting, the interest of the loan, or for example the difference between the adjustable interest rate vs. the fixed interest rates. FHA, conventional, RD, VA… Again researching what’s available for first time home buyers.