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How To Make Your Dream of Homeownership a Reality

Posted by Paul Lopez on Friday, February 24, 2023 at 10:46:16 AM By Paul Lopez / February 24, 2023 Comment

 

According to a recent Harris Poll survey, 28 million Americans genuinely plan to buy a home within the next 12 months, and 8 in 10 Americans think that purchasing a home is a priority. It makes sense that there would be interest given the numerous financial and non-financial benefits of home ownership.

It's improbable that all 28 million Americans will succeed in that endeavor in the upcoming year, though. According to experts, approximately five million residences will be sold overall in 2023. Why is the difference so significant? It's mainly because purchasing a home might provide difficulties.

Which of the following are keeping you from pursuing homeownership at this time? was posed as a question in the same poll.

I don't have enough saved up for a down payment, said 34% of respondents.
"My credit score", 30% responded
Here is the information you need to know if you want to purchase a home.

Save For Your Down Payment

A significant portion of the upfront cost of your house is made up of your down payment. Most house buyers make a down payment (an upfront monetary contribution) and then borrow money (a mortgage) to cover the remaining costs.

It's a common misconception that your down payment must equal 20% of the buying price. Actually, 20% down is not always necessary. In reality, the National Association of Realtors (NAR) reports that the median down payment for today's buyers is merely 6% for first-time buyers and 14% for the average buyer.

No matter how much cash you can save up for a down payment, be aware that assistance is available. To assist you get closer to your down payment target, a local lender might present you with options. Moreover, there are lending options including FHA loans that only require 3.5% down payments for some buyers as well as VA loans and USDA loans that don't require any down payments at all for qualified candidates.

Here are some additional suggestions to support you while you save for your down payment in addition to aid programs and other loan types:

1. Remember to factor in closing costs. Closing expenses are normally between two and five percent of the home's purchase price in addition to your down payment.
2. Maintain your savings. Your savings shouldn't be completely depleted by the down payment. After you move in, it's crucial to continue saving money for homeownership costs.
3. Explore your options and lean on your trusted advisor for expert guidance. Do your research, check into the resources accessible to you as a buyer, and ask questions.

Improve Your Credit Score 

You can tell how financially reliable you are to lenders by looking at your credit score. You can typically borrow more money at a better interest rate if you have a higher credit score. There are things you can take to enhance your credit score if it's keeping you from obtaining an affordable mortgage. Here are two:

Pay your bills on time. Your credit score rises when you make on-time payments on your bills. It suffers when you are late. What's a simple approach to paying your payments on time? Try to set up automatic payments.
Mix it up. There are many various forms of credit, including mortgages, credit cards, and auto loans. Also, combining them raises your credit score.

Bottom Line

Let's get in touch so we can start preparing if you want to buy a house this year.

 
The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. Keeping Current Matters, Inc. does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. Keeping Current Matters, Inc. will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.

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