Buying a home may seem out of reach. Have you ever ask yourself this question: “Will I ever be able to buy a home of my own?” While you don’t really need to own a house to be happy, many of us still want a place we can be proud of. It’ll take some creative thinking yet it is possible to buy a house someday. Here’s how you can do it.
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If you want to establish yourself in an expensive place long term, you’ll have to save earnestly and open to the idea of waiting a little longer to buy. A down payment averages at least 24 percent of the home’s purchase price in high-priced locations. That makes the down payment one of the biggest difficulties to overcome if you’re truly focus on living in a competitive market, where mortgage lenders look for more money down as an indication that you’re an attractive buyer.
Stash away some part of your yearly bonus from work, or increase the amount you save whenever you get a raise or stop paying for services you don’t use. Set up an automatic transfer into a savings account designated for your down payment so it grows without much effort.
Check out programs for First Time Home Buyers
Those strategies might not be enough to reach your down payment goal. If you’re keen to buying a house soon, some government-sanctioned companies will let you make a down payment of just 3 percent of the home’s price. The Federal Housing Administration also offers mortgages that require down payments of 3.5 percent. You’ll need to assess what it would cost to get a smaller down payment. You’ll pay mortgage insurance if you put less than 20 percent down, for instance, which increases your monthly mortgage payment. A mortgage calculator can help you figure out what monthly payment you can afford.
Look in affordable locations
You might be able to have your long-awaited housewarming party sooner — without stretching your budget to its limit — if you live in or move to a region known for its affordability.
Lower prices mean lower down payments and a mortgage that won’t take a huge chunk of your income. Living in a lower-cost area isn’t the right choice for everyone, but it’s an option if you’re ready to put down roots sooner than a higher-priced city will allow.