Understand your financing options and credit score when home buying
Welcome. Home buying today can get a little tricky. In today’s housing market, potential home buyers face numerous challenges, including soaring housing prices, shrinking purchasing power, and increasingly expensive rent. However, through research, flexibility, and a little financial ingenuity, today’s buyers are discovering new ways to achieve their dream of homeownership.
Exploring Financing Options and Minimum FICO Scores
The first step in determining if you can afford a home is to explore the financing options available to you, including mortgage eligibility and the required down payment. Familiarize yourself with the minimum FICO score lenders require and assess your own credit score to set realistic expectations.
Increase your income and savings potential
Pursuing Additional Income Streams
While it’s possible to enter homeownership with a lower annual income, it’s more challenging. Consider pursuing additional income streams or cutting expenses to increase your savings and improve your chances of affording a home in your desired market.
Rethink the down payment
Debunking the 20% Down Payment Myth
Many renters believe they need a 20% down payment to buy a home. However, this isn’t always the case. Although a smaller down payment may require additional considerations like private mortgage insurance (PMI), many find it a worthwhile trade-off. In fact, more than half of recent home buyers put down less than 20%.
Seek help from friends and family
Receiving Gifts or Loans from Loved Ones
If you’re struggling to save for a down payment, consider reaching out to friends and family for assistance. Many home buyers receive gifts or loans from loved ones to help with their down payment.
Be flexible with your home search
Compromising on Location to Find Affordable Options
To secure a home within your budget, it’s important to remain open-minded about location, condition, and type of property. Buyers willing to compromise on their initial wish list may find more affordable options in less popular areas or by considering fixer-uppers.
Considering Fixer-Uppers as a Path to Homeownership
By understanding your financial options, increasing your income and savings, rethinking the down payment, seeking help from loved ones, and remaining flexible in your home search, you can overcome the hurdles of today’s housing market and make your home buying dreams a reality.
Explore our blog for more insightful articles and resources.
If you found this content valuable and engaging, we invite you to explore our blog for more insightful articles and resources. Stay informed and inspired by delving into a wealth of information designed to enhance your knowledge and enrich your experience in the world of real estate.