Think You Can’t Afford to Buy a Home? Think Again
by: Brittany Fisher
Owning your own home does not need to be an impossible dream. There are more options than ever available to give you the security many of us crave. Here are some tips to help make your home purchase attainable and affordable.
Start with Research
The best way to begin is to look at your targeted area. What is the average down payment for your dream city, and what percentage of homes sell under their list price? This can give you a good idea of what you need to have upfront and what you can pitch with the hopes of being successful. To really get a good idea for what you should be offering, look at homes that arecomparable to the one you want. Assess homes in the same area that are roughly the same size, and see what they sold for. This average is calledmarket value, which will give you a good idea of what others are paying. For example, if you’re looking to buy a home in Chandler, the average sale price was $336,000 for the previous month.
Earning back and saving every single penny counts. This doesn’t mean restricting your diet to the clearance section at the grocery store, but doing little things that can all add up. One such method is to sign up for a rewards credit card that gives you cash back for purchases. This is only a viable option if you always pay your balance back each month, rather than letting it accrue interest, which will lose you money. You can also save thousands each year by signing up for rewards programs at clothing stores, grocery stores, and just about anywhere that issues them. Plenty of websites offer cash back for purchases as well. You get quarter payouts, but have to make sure your purchases qualify. This, too, can save you hundreds a year, which can be put toward a down payment or home expenses.
You don’t have to cover all of the costs. Try tonegotiate different terms with the seller, even request them to pay for the closing costs of the sale. Also, reach out to your bank or lender. You may be able to avoid some fees or at least get them lowered. There are going to be morefees than you can count. You may have to deal with an underwriting fee, an application fee, a fee for looking up your credit report, home inspection fees (which cost an average of $244 to $421), insurance fees, title fees, appraisal fees, and the list goes on and on. Take the list your lender gives you, and review it carefully. Question each item, and ask why it costs as much as it does. You can see which fees might be repetitive, and which your lender is willing to omit.
Share the Equity
If you truly cannot come up with the funds for a down payment by yourself, there is an option for you, aside from taking out loans or getting further insurance. Instead, equity sharing requires you to get an investor who will split the cost of the down payment with you. After a few years, allowing you to save up, you will have two options. You can sell the property and split the profit, or you can “buy out” the investor.
Everyone deserves to have a place of their own, one that offers security and that you can do with as you please. Your bank account does not need to hold you back from the purchase. Save where you can, earn money when you can, and don’t underestimate the power of haggling. You just might be able to get the home of your dreams.
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