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First-Time Homebuyer Tells All
Are you tired of renting?
YuDania S. was tired of wasting money on rent and decided it was time to pursue her goal of buying a home before she turned 30. She encountered many obstacles, but along the way she improved her credit rating, found resources and help with her downpayment and now lives in her own beautiful home with her Cocker Spaniel in Green Valley Ranch. We sat down with YuDania and asked her questions about her homebuying experience and asked what advice she had for others who are interested in becoming homeowners. Here is YuDania's story and her advice to help you get started.
Q. What made you decide to buy a home?
A. I always wanted to purchase my own home, and I set a goal to own a home by the age of 30. I was tired of renting and considered it to be a waste of money. I knew that when you buy your own place, the equity in your home builds and you begin to increase your personal wealth. I wanted to be part of the American Dream - to own my own home and to own a pet. It's hard for renters to have a pet and this is something I always wanted.
Q. What resources did you seek and use?
A. The first thing that comes to mind is CHFA, that's the Colorado Housing and Finance Authority. They provide assistance for first-time homebuyers, homebuyer education classes, and referral services to lenders and real estate brokers familiar with FHA loans.
Q. Did you go to homebuying classes?
A. Yes, all first-time CHFA borrowers are required to attend a CHFA-approved Homebuyer Education Class prior to closing the loan on their new home. I went to an all day class that qualified me for down payment assistance. The classes were very informative and taught me the many things that a homebuyer should understand and consider. They taught me about the advantages and disadvantages of a used home versus a new home, different types of financing and how to shop for a loan. The classes were taught by CHFA-approved nonprofits and housing authorities, many of who are HUD-approved housing counselors. They referred me to a lender and a real estate broker, who provided invaluable service and helped me find this newly developed area where I now live. The lender informed me of the amount that I qualified for and I made an offer on a new home. I obtained FHA financing because the qualification requirements fit my needs, but people should explore other resources and find the one that best fits their situation.
Q. What are some challenges or surprises that you overcame in buying your home?
A. I worked with CHFA to clean up my credit. There were some errors on my credit report, and I had previously been slow with some of my payments, but all my bills were paid. My credit report did not reflect that my bills had been paid, and my counselor gave me phone numbers to call and people to write to clean up the discrepancies. I paid my bills, but they weren't marked paid on the credit report. The corrections improved my credit rating and helped me qualify for a higher loan amount. The other challenge was trying to find a home that wasn't too small. In metro Denver, the available housing was less then what I expected to find or wanted. My realtor helped me find a new development with more spacious living dimensions. The area was totally new to me and I was amazed by what I found.
Q. What was the turning point?
A. At first it was discouraging, because I was denied several loans. But, I was determined to keep going - I wanted to buy a home. Because of the homebuyer education that CHFA provided I stayed focused, knew I could do it, and I made it happen.
Q. What did you learn and what would you change?
A. Everyone, especially young people, needs to be concerned about their credit. Make sure you stay on top of your credit. Your credit has a major impact on your future. Keep up with your payments. Try not to take on too much debt, and don't borrow more than you can afford to pay. Maintaining your credit is key to buying a home. Also, if you can save, save as much as you can. You need money for fees, closing costs; all the money that you save for your down payment helps build your equity.
Q. Any other advice?
A. Maintain your credit. Save money for out-of-pocket expenses.
Attend a homebuying class, explore your options and find out where
you can get assistance and resources. Set your goals, be determined
and don't give up your dream.
YuDania S. lives in her new spacious home and said that many people are just not aware of all the homeownership options and assistance that is available. She said that she was fortunate to know about the resources because of what she learned from a previous job. She also encourages individuals to seek the phone number and addresses of the nearest housing counseling agencies. Here are some resources that can help.
HUD's Colorado homeownership page (www.hud.gov/colorado)
Colorado Housing and Finance Authority (CHFA) (http://www.colohfa.org/)
Content Archived: April 5, 2011