On April 18, 2016, Business Insider reported that rental prices in major markets, including San Francisco, had finally begun to drop. But let’s face it—the sub $1,000 one-bedroom apartment in major markets is now merely a story for millennials to tell their grandkids.
For those thinking about becoming a first-time homeowner, the long-term benefits of home ownership make more sense on paper than renting. However, to a renter who already has a full-time job to worry about, the idea of mailing a check once each month can sound far less stressful than worrying about a down payment, private mortgage insurance, and closing costs, among many, many other things.
One constant formula used in the housing industry states that the less daunting home ownership feels, the more likely renters will become homeowners. Even amid increased regulation, private lenders have been working for years to make home ownership comprehensible, simplifying the process with state-by-state training and testing requirements that ensure loan officers are able to handle a wide index of scenarios. With top lenders, it is even common for borrowers to have their loan officer’s cell phone number.
Although borrowers who take advantage of these highly skilled loan officers are never alone in the home buying process, it is critical for first-time homeowners to go into this process with an understanding of some of the unique aspects and costs that go into a mortgage. Here are the most important ones: