When Danielle and Jimmy returned to their home state after three years
in Germany, they spent the next six months looking for their first
home.
"Location was so important to us. We got used to walking everywhere
while we were in Germany. Grocery stores, restaurants, beer gardens and
pubs were all within walking distance of our apartment. We wanted to
find a neighborhood like that," explains Danielle, an employee relations
attorney.
They found the perfect neighborhood: Bay View, Wisconsin. They
also found a house in a perfect location, right across from a park,
with a lovely view of Lake Michigan. But the house itself wasn’t so
perfect: it needed about $20,000 worth of renovations. And the sale
price was on the high side of their price range.
"We looked at other
homes in the neighborhood that were cheaper and in better shape. But we
kept coming back to this one. It was in the perfect spot. And when we
found out there is a beer garden in the park in summer, it was a done
deal!" Danielle says.
They successfully closed on the house in January
and spent a month painting, installing a new kitchen floor and
remodeling the master bath before they moved in.
So how did Danielle and
Jimmy manage to buy a more expensive home and have money left over to
fix it up? With direction from their loan officer, here’s how they did
it:
1. They were pre-approved before starting the house hunt, so they
knew their price range. 2. They used conventional financing with private
mortgage insurance, which allowed them to put down 5 percent instead of
20 percent. Their mortgage payment is higher, but still within their
monthly budget. 3. The lower down payment made it possible to buy the
more expensive home. 4. Putting less money down also allowed them to keep
cash for the renovations.
For more information on how to purchase a home
with conventional financing and a low down payment, check out the
articles and videos on this website, created especially for first-time
home buyers: readynest.com.
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