These tips will put you on track to achieve the dream of homeownership.
Today, we’re here to help you figure out what you need to do to make your dream of homeownership a reality. According to a recent Harris Poll survey, eight out of 10 Americans say buying a home is a priority, and 28 million plan to buy within the next 12 months. However, it is unlikely that all of them will accomplish that goal in the coming year, and experts project a total of around five million homes will be sold in 2023.
This big difference is partly because buying a home can be challenging. In the same survey, when asked which of the following is preventing that person from pursuing homeownership at this time, 34% said they didn’t have enough saved for a down payment and 30% said it was about their credit score. If you want to buy a home, here are a few things you need to do to accomplish that goal.
First, you need to save up for your down payment. It’s a big chunk of what you pay upfront for your home, so you should be prepared. However, it’s a long-standing myth that you must pay 20% of the purchase price. In reality, 20% isn’t always required. According to the National Association of Realtors, today’s median down payment is 14% for the average buyer and just 6% for the first-time homebuyer.
“Buying a home can be challenging, so it’s important to be prepared.”
There are even loan types with down payments that are as low as 3.5%, as well as some options like VA loans and USDA loans with no down payment requirement for qualified applicants. 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. We always want to make sure that our buyers are getting the best advice possible, so we have some excellent, experienced lenders that we trust and can recommend to you.
In addition, remember to also factor in closing costs. Those are usually between 2% and 5% of the home’s purchase price. Therefore, your down payment shouldn’t deplete all of your savings. It’s important to still have some money set aside for ownership expenses after you move in. Also, you should explore your options and lean on your trusted adviser for expert guidance. Do research, ask questions, and look into resources available for buyers like you.
Also, you need to improve your credit score. This number indicates to lenders how financially reliable you are. A higher score usually means you’ll be able to borrow more money at a better interest rate. If your credit score is preventing you from getting an affordable mortgage, there are things you can do to improve it, so ask for help.
If you want to purchase a home this year, let’s connect so we can get you started. If you have any questions about this topic or real estate in general, please reach out to us. We would be happy to serve as your resource for all of your real estate needs.