Factors such as student loan debt, competitive real estate markets and low housing stock relative to demand have made many people believe that homeownership is beyond their reach. These issues can make homebuying seem intimidating, but they should not prevent you from making your dream of owning a home come true! There are some things that you can start doing right now to help make homeownership a reality.
Research Your Options
The average home price nationwide, as of this writing, is around $245,000. This sticker price can be intimidating, but there are many home loan solutions available to cover this payment.
The most common is a conventional mortgage, with many opting for a 30-year term limit. Others decide to use an FHA loan, a federally backed loan that allows you to put down only 3.5% of the home’s price. Some of you may be eligible for a VA loan, which provides a no down payment option to those in the armed services!
There is a long list of options for borrowers from diverse financial backgrounds, so be sure to talk to a Mortgage Loan Originator to find the right one for your unique homebuying situation.
Research Your Market
Prepare for your home mortgage by researching the area in which you plan to live. Use the following questions to guide you:
- What is average the home price in the area?
- What factors will affect the area in the next 10 years?
- Is the market appreciating or depreciating?
- What is the cost of living?
These questions will help you factor in both long-term and short-term costs in your chosen area. After you’re been pre-approved and have a solid idea of your buying budget, work with your Real Estate Agent to research home prices in the area in you’re interested in living in.
Reduce Your Debts
One of the biggest barriers to owning a home is a shortage of liquid cash. Many prospective homebuyers feel that they don’t having enough money after their monthly bills and debt payments to take the first steps toward homebuying.
This is simply a hurdle you can overcame by reducing your overall debt. You can create an additional stream of income, rework your budget, reduce your disposable expenses or even negotiate with your creditors and lenders.
Additionally, you can begin paying more than the minimum on your debts each month. This not only shortens the life of your debt, but you’ll end up paying less interest. You can then put that money to better use for things like buying a home!
Enlist the Help of Friends & Family
It’s understood that saving for a home can be difficult, so most lenders allow you to use cash gifts from friends and family members to help you afford the purchase.
If your friends and family want to support your homebuying, it’s worth giving some serious thought to how you can use this money to close the gap between the down payment needed and your dream home. It’s possible to get enough gift money that can be used toward the down payment.
Cash gifts can give your dreams a significant boost, so don’t discount this source of funding when thinking about homebuying in the future.
Move to Another State or City
You may live in a housing market with high real estate prices outside of your current price range for a home. However, there is one simple solution to making homeownership more affordable: change your location entirely.
Moving to another state or city involves a laundry list of to-dos, but if you are willing and able to do so, moving may open up your homebuying options.
Buying a Home Is Within Reach
Homebuying for the current generation is very different than it has been for any previous one. With some pre-planning and focus and possibly, help of friends and family, purchasing a home is possible.
To get more information on how you can create a solid plan to homeownership, fill out the form below and a Mortgage Loan Originator will be in touch with you.