This post is written for anyone that might need help buying a first home in Tooele County. I had saved it to pass on so long ago that I have now forgotten where it came from. I think it was Bill Gassett, but I am not sure. I do link to one of his posts though so he will get some credit.
Any way it is good information and should help those thinking of buying a house for the first time.
I have added a few personal comments and some other links that I think might be helpful for first time home buyers.
A natural progression in life is to own your own home and if you’re doing this for the first time, there may be some things that you can do to improve your chances. Just like I don’t know how to change the transmission in my Tahoe, if you’re not in the real estate or mortgage business you may miss something. Here are some thoughts that will hopefully help you reach your home buying goals.
Use the advice to increase the odds of buying your first home successfully with as little stress as possible.
Reduce Your Debt
Your credit score will probably be the first thing that a loan officer will look at so managing your debt is key to having a good score. Your credit score plays a huge role in what kind of interest rate that you get. So, of course paying your bills on time is important but be sure to not max out your limits. Mortgage companies like to see some debt and that you’re paying on time but they don’t like to see that a majority of your income is going towards that debt.
I have heard that as a rule of thumb, lenders give the highest marks on credit cards that are current, have a solid payment history and have a balance not greater than 50% of the loan limit.
Increase Your Savings
One of the major factors in buying your first home is cash. Unless you’re getting a mortgage that doesn’t require any down payment like a VA Loan, you’re probably going to have to put down between 3%-5% of the loan amount. You will also have closing costs to consider which could be several thousand dollars (varies depending on the sales price). There are a number of costs that go into buying a home so the more cash that you have the better. Cash is king in this case.
First time home buyers in Tooele County have a tool that few other counties have. One hundred per cent mortgages. The USDA offers a mortgage to select counties around the country that requires no down payment. This product, called the “rural housing loan” was created to help stimulate growth in rural areas. Tooele City, Grantsville UT, Stansbury Park, Erda Utah, and Lake Point are all areas that qualify to receive this government program.
When you do find a home that you fall in love with, you’ll become laser-focused to get that home under contract. At this point you won’t want to have anything that will hold up the process. Sellers like to see a Pre-Approval Letter from a reputable bank delivered along with your offer so it’s crucial to get this done before you go house shopping. Don’t get this letter confused with pre-qualification. Pre-qualification is often done over the phone or even through the internet and the loan officer hasn’t really verified your information.
There is a significant difference between a pre-approval and pre-qualification when getting a mortgage.
If you think you may have special lending needs make sure the lender that you work with, is familiar with lending in Tooele, and knows ALL of the available loan products available for the area. USDA loans are a good example. Knowledge of FHA limits and local grants are the type of things your lender should know.
We work with a number of local mortgage lenders and loan officers that have performed for our clients in the past and would be happy to recommend a couple for your consideration.
Identify Your “Must Haves” and “Nice to Haves”
Resist the urge to be “like the Jones’s”. I think it’s a great practice to actually write down on paper (or in your Ipad) what you have to have in a home and what you can live without. This is often called “Must vs. Lusts”. Even if you qualify for a more expensive home, you may not want to spend that much on a monthly basis. For example, if you have 3 kids, you may need a 4 bedroom house. On the other hand, a wine cellar may push the limits on your budget. Get the point?
A possible suggestion here would be to to buy a Tooele house with less finished square footage, but an unfinished basement. As the family grows and needs change you can finish additional space to meet new requirements. It is always smart to have at least one bathroom plumbed in a basement.
Consider Areas Outside of Your Target Area
We all have certain neighborhoods that we love and dream of living in some day, however, don’t put yourself in a bind just to be there. This is your first home so your target area probably isn’t going anywhere. If your budget is $250,000 and your dream neighborhood is supporting $300,000 houses, you may need to “look outside the box”. The mindset of the first time home buyer should be, get most of the things that they need while staying within a price that they can comfortably afford.
Even in a small rural area like Tooele County, with a cost per square foot of around $131.00, neighborhoods and even cities can vary considerably. There are a number of reasons for this that should be examined when you look more in depth at choosing where you want to live. For now let’s just use a quick and dirty method to get started.
Notice the difference of cost per square foot prices of listings in various local Tooele cities.
- Tooele City: Listings in the city average about $127 sq ft. That’s $4.00 a FT. On a 2000 sq ft house that’s $8,000.
- Grantsville UT: At $118.00 sq.ft the difference on that same house would be significant.
- Erda Utah: Listings in Erda are selling for about $134.00 sq.ft..More expensive than the County average by about $3.00. ( remember $3.00 x square foot difference = value number)
- Stansbury Park UT: At $123.00 housing cost on average would be $8.00 sq.ft less than Tooele County.
- Lake Point UT: Average cost per sq.ft. is about $11.00 less so on a 2000 sq.ft house you would expect to invest about $22,000 less than in the County of Tooele.
If you need help buying a first home in Tooele County, this is probably the one you should pay attention to.
You Don’t Have to Have Your Cake and Eat It Too
Because most people aren’t buying their “forever” home as their first home, you may be able to settle without having a few of those “wants” that you weren’t able to get this time. Typically, first time home buyers keep their place for a few years which usually gives them time to develop some equity in their property. This should allow you to maybe finally obtain most of the things that you wanted the first time.
This is the part of this advice that I love to give and hope you will pay attention to.I’m going to suggest that you may be able to “have your cake and eat it to”.
It’s simple, Do the same comparison with homes listed in those cities that you did in Tooele and you may go AHAH. Maybe I should look a little closer at what’s available just 30 miles from downtown. (In the other direction).
I’m not going to try to sell you on the idea, but I feel it needs to be presented. Specifically presented to those home buyers looking at homes for sale in the south end of the valley, like Herriman and South Jordan.
It would appear that a 3000 sq.ft home in Herriman Utah would cost $45,000 more than the same square footage in Tooele County. Give me a call if you would like to compare savings with other communities along the Wasatch.
Use a Realtor
I strongly believe that working with a Realtor as buyer, you can definitely increase your chances of closing on your first home. There are many reasons to use a buyer’s agent but for one, they are looking out for your best interests. If price is a issue, your Realtor may be able to successfully negotiate the sales price down to where you need it. That extra $5,000 could be the very element that you need to help you buy your first home. The best news is, you don’t have to pay your buyer’s agent because all fees are paid by the seller.
If you have been following my real estate posts for any time at all you know I have written about this subject many times. You can see some of these articles on my blog, Tooele Real Estate. The biggest takeaway from any of these is, make sure your agent is local! You want local representation. You want someone on your team that understands water rights, animal rights, current zoning and what could be proposed. Try to partner up with someone that is an active part of the community, and that attends planning commission and zoning meetings.
There are obvious advantages if you partner with someone who has worked with every lender, every builder, every tradesman and is not afraid to share their experience with you.
After that call, you wont need help buying a first home in Tooele County.