ADAM GARRETT

See current offering for pictured program above including current rates here. Keep in mind that for the resource above, above average income borrowers (adjusted for family size) for their area have limitations on the areas where they are able to buy. Also NACA is a non-profit, so while the #'s provided for many are unmatched, it's a bit like a crowded DMV & the process isn't for the faint of heart.

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Another way to reduce initial costs in a very competitive market is to offer a price that is above asking price while requesting 3% closing costs on a home that you expect will go fast. While in a multiple offer situation it may not work, some homes are still being sold with only 1 offer. In a densely populated city in a hot market (Portsmouth in Summer 2021) I closed on a home where the buyers got 3% closing costs because we went up in price above list price by slightly under 3%. The closer said it was the first time in a while where a buyer was getting 3% closing cost assistance or more. That's not always necessary even in a hot market, as evidenced by another property I closed on in the Spring of 2021 that the buyer got for slightly below asking price while still getting around 3.5% in closing cost assistance agreed to by the seller in a contract.

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Reducing ongoing costs:

Home warranties can be a very helpful way to reduce ongoing costs, especially in your first year of homeownership & especially if you don't have the liquid capital needed to cover systems when they break down. Home insurance is another very helpful asset to reduce your ongoing costs from things like storms.

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One way to reduce ongoing costs is to target homes in your home search that will have low maintenance costs. For instance, that's almost a given with a new construction property that's built by a reputable builder. In Aug 2021 my wife & I purchased a new construction property with no yard maintenance (covered by the relatively low association fee for what was included). Homes that are brick or hardiplank also have reduced exterior maintenance required. Some homes have roofs built for >50 years, even if they're older homes, such as those with a slate or steel roof. Even a standard 30 year roof is great if it was installed well & was recently put on. Sometimes even older homes have updated systems like HVAC, AC, and water heater. The life of an HVAC & AC unit(s) can be extended by regularly changing out filters & a regular maintenance agreement like I have on my rental property on a system that isn't old. Buying a home that uses more exterior composite than wood is also a way to reduce maintenance. A home with no trees that can fall on it that is not in a flood zone is another way to reduce costs. Low or no HOA fees is another way to reduce costs. To reduce my lawn care time/$, I went through at least 4 or 5 lawncare people before settling on one who does an excellent job at a low price on my rental property, and the amount of times per month (during the time when grass grows) he does work I reduce based on the tenant's preferences. While I haven't purchased a robotic landscape option yet, that's a heavy consideration of mine.

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Another way to reduce costs that most wouldn't consider but that I did while a bachelor is to rent out rooms of my house. While I did a lot of research on the subject prior to it in order to do it well, & know that some have horror stories, I had an excellent experience. My rent received was about the same as my mortgage amount during the month or 2 when I tested renting out 2 rooms at once soon before I got married. 

For those not wanting to rent out rooms of their house but wanting something similar, duplex, triplex, & quadplex purchases are an option. 

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See more on reducing costs below in the financial assistance section. 

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2. Your credit (unless buying in $ or using a loan where credit score is not considered)

While some loans have a flat rate after meeting minimum requirements, most loans will have different interest rates depending on your credit. If you're able to quickly improve your credit in order to get a much better loan rate, it might be worth waiting, though if the interest rates, which fluctuate over time, move up faster than you, it could be a net loss to wait, so there is that element of risk. To see more on credit, go to my page on the subject here.

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3. Your living needs

If you're about to be stationed in Hampton Roads coming from Germany, it's critical that you get either a rental or a purchase soon. If you do a rental first, then expect to be stationed somewhere else in 4 years, you'll likely be losing out some financially if the market appreciates in the next year (it typically does but to see 1 year projections of appreciation by zipcode, go here in Zillow. It could be a lot less costly to do an extended stay with temporary housing for a month or 2 here than to rent for a year. Some buyers opt to purchase before ever coming to the area, and I have plenty of digital options for that as well as a great camera phone for live video.

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Some prospective buyers need a unique home that might not be available for rent because the inventory for rent is much lower than for purchase in and around Hampton Roads & because landlords won't allow certain things often. For instance, in the past 24 hrs at the time of this writing I spoke to someone where one of the reasons they wanted to buy was because they had 3 dogs and a cat, were getting work in a rural area, and knew that their options for rent would be limited.

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Lease terms is another factor to consider. If you are renting a property and don't have lease terms up front within your lease regarding breaking your lease, you could be in a tough position if looking to break your lease before a purchase. While in some cases, it would be worth it to break your lease, in other cases, such as if the market is expected to go down between now and then due to seasonal fluctuation & the interest rates were expected to go down in the meantime as well, it could be better to ride out the lease.