Are you a first-time home buyer that is worried whether or not you’ll be able to afford anything? It’s a significant investment that requires a lot of money up front to the point that many young Americans struggle to get into a house. Between credit card debt, student loans, and the rising costs of living, many feel it is next to impossible to get into a home.
If you’re one of the many Americans that want to be in a house but find that they can’t, there are things you can do to turn that dream of homeownership into a reality.
Look Outside of the City
If you compare the prices of houses in the city to the suburbs and rural areas, the city prices will likely be higher. Take a look at options that are just outside of the city and a bit farther away as they’ll become more affordable.
When buying a house in the city, the property price tends to increase when there are more amenities around. That is why the downtown areas will be more expensive than neighborhoods farther away.
Look At Different Mortgage Options
There are many mortgage options available, especially for first-time home buyers and lower-income families, that are more reasonable. One of those options is a USDA loan which is for those who purchase properties in rural and suburban areas. It helps to make these properties more affordable for low-to-moderate income families. However, there are USDA loan limits (along with many other loans and mortgages out there), that you need to consider.
Set a Budget
One way that will make not just a house more affordable, but everything else, in general, is to create and follow a budget. Budgets are an excellent way to keep track of your finances so you know where you need to cut back on spending, and if you can afford to splurge on something.
Create a budget that is specifically for buying a home. It should favor heavily toward saving up for your down payment and additional housing costs.
Budgets can be done in many different ways. Some people like to do them by hand using an excel spreadsheet. Others use budgeting software that’s available. Personal Capital is probably one of the most common, but Quicken is an old favorite. There are also plenty of Quicken alternatives you can choose.
Find a Side Gig
What’s one way to afford something new? By bringing in more money. The more income you have each month, the more you can put towards debt, and
Improve Your Credit
Although improving your credit won’t make a house any cheaper, it will give you a better chance of securing a lower interest rate on your mortgage. When you have a lower interest rate, it means less money you need to pay toward interest every month. This can help make your mortgage more affordable.
Re-Evaluate What You Need
If you’re struggling to find a house that you can afford, you may need to go back to the drawing board and re-evaluate what you’re looking at. Especially if this is your first home, you can’t be too picky on your “needs” list. If you have a more general list of what you want in your home, it may open up less expensive options that you’ll be able to afford.
