How to Make Your Dream of Homeownership a Reality
How To Make Your Dream of Homeownership a Reality
According to a recent Harris Poll survey, 8 in 10 Americans say that buying a home is a priority, and 28 million Americans actually plan to buy a home in the next 12 months. Homeownership provides a lot of financial and some nonfinancial benefits, so the interest is understandable.
Experts project a total of around five million homes will be sold this year so not all 28 million Americans are gonna accomplish their goal. So, why is there such a big difference? Well, in the same survey, they asked, “Which of the following are preventing you from pursuing homeownership at this time?”:
34% answered, “I don’t have enough saved for a down payment”
...And another 30% answered, “My credit score” If you’re aiming to buy a home, here’s a couple things you’ll need to accomplish the goal.
Save for Your Down Payment
Your down payment is a big chunk of what you pay up front for your home. For most home purchases, buyers put down a down payment and then take out a loan also known as a mortgage to pay for the rest.
It’s a longstanding myth that you need to pay 20% of the purchase price for your down payment. In reality, 20% down isn’t usually required. In fact, according to the National Association of Realtors, today’s median down payment is 14% for the average buyer and just 6% for a first-time buyer.
Regardless of how much money you can save for your down payment, know there’s help available. A local lender can show you options to help you get closer to your down payment goal. Plus, there are even loan types, like FHA loans, with down payments as low as 3.5%,, as well as options like a VA loan or a USDA loan which require no down payment.
Beyond assistance programs and different loan types, here are a few other tips to help you as you save for your down payment:
In addition to your down payment, you may need to save for closing costs as well, which are usually about 2% of the home's purchase price. But this is where a real estate can help by negotiating with the seller to get them to pay those fees.
The other thing you can do is improve your credit score. A higher credit score usually means you’ll be able to borrow more money and at a better interest rate. If your credit score is preventing you from getting an affordable mortgage, there are things you can take to improve it.
The first and most obvious is to pay all your bills on time. when you pay your bills on time, your credit score improves. When you’re late, it takes a hit. One way to make paying your bills on time easier is by setting up automatic payments on your accounts.
The second thing is to start working with a trusted mortgage broker, now. A good mortgage broker can help coach you toward home ownership even if you have bad credit.
If you want to purchase a home this year, let’s connect, I can help get you on the right path and introduce you to a great mortgage broker as well.
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