Road to Homeownership

The road to homeownership at the present time can be a tough one as salaries are small while rent and prices are sky high. However, homeownership is not impossible. It will take a little more patience and creativity to put everything in place. Here are some things what one can do:

Explore the options and maximize the credit score. Home buyers need to know of the financing options from different lenders, including the types of loan and different mortgage rates. They also need to know their budget, the final total price of the property, how much they can put down, and how much they must pay monthly. Work with a lender to get pre-approved on a loan early is equally important as some lenders have strict requirements for a loan such as a good credit score and collaterals. By working with the lender early in the process, it gives the buyer time to fix what they need to fix to get the funding that they need to purchase the home. It is said that some buyers do not know the resources to help them make that first down payment.

Save up the money. Buyers who are making $37,500 or less would have a very hard time entering the real estate market, according to the Zillow Chief Economist, Dr.Svenja Gudell. Home buyers should be netting at least $75,000 in salary to be comfortable to make the purchase in the current real estate market. However, the Zillow Group Consumer Housing Trends Report 2019 also points out that even households with two incomes can also struggle to buy anything in the currently busy market. The solution to small salary/income is to look for a job with a better pay, cut back all unnecessary expenses, and save up as much as possible. The key is making enough to save!

Save. Save enough for the down payment. With home prices up in the hundreds of thousands of dollars, it often requires tens of thousands of dollars for the down payment. However, there are also options, though pricey, for those buyers who cannot afford the down payment. One option is adding the private mortgage insurance (PMI) shall the down payment is small. However, not to worry because according the Zillow Group Report 2019, only one-fifth of the buyers put down 20 percent as down payment and 56% put down less than 20 percent. It is not impossible to buy a home low down payment, however, the buyer should make every effort to gather up enough much money for the standard down payment amount (i.e. savings, friends and family.

Make some tradeoffs. Homes in a more populated area that are closer to the school, shopping centers, work are often highly priced. Buyers should explore other areas that are less popular, a little far out, and less populated to really get the most affordable price. A smaller price tag on a home would require a smaller down payment which can make it easier for the buyer. Some tradeoffs or compromise based on the budget is worth it since the buyer has a better chance to become homeowner sooner.

Topics: home buying, real estate, tips

Work cited: Zillow Porchlight; https://www.zillow.com/blog/what-it-takes-buy-home-america-221191/