If you think that buying a home has become less affordable in recent years, this is not a problem. is not your imagination. A study by Harvard University found that nearly 40 million Americans live in housing that they can not afford, which means that they spend more than 30% of their income on the place they own or rent. This represents an increase of 146 percent over the past 16 years.
According to the Harvard study, house prices rose 50% in some areas – but wages did not keep pace. This means that millions of Americans who dream of owning a home felt embarrassed not only by the student debt and credit card debt but also by their reduced purchasing power
The trick, then, is to find ways to make buying a home more affordable – and most of these have nothing to do with your income. In the last six months, I bought a new house and then sold my old house. I've learned a lot about how to find homes online. In today the age of technology the purchase of a home is possible and finding the right deal is possible. Here is how I did it.
Commission on real estate transactions is a little more than 5 percent to the National scale. It's a big chunk of change at the fork more than you're moving into a new home that may need repairs or furnishings. Some people avoid the commission by working with a friend who is a real estate agent – and willing to give up his agent or broker fees.
Another option is to use a service such as Beycome which removes the middleman (aka the real estate agent) and allows buyers and sellers to interact directly. The platform scans the standard FSBO transaction by helping with announcements, scheduling home visits, and finalizing the agreement with a contract.
Increase your credit score.
It is not a secret that a higher credit score results in a lower interest rate. Increasing your credit score from "fair" to "good", for example, could make mortgage payments feasible – and improving your credit score could also help you qualify for loans or lines of credit for things you might want to do at home in the future, such as replacing furniture or building an addition.
To increase your score, pay all your bills on time, keep your credit card balances down, and avoid opening new lines of credit when it 's up. is possible – every "hard blow" on your credit affects your score.
Look for the best numbers.
Do not settle for the first loan rate you are given – go around to see which lender can give you the lowest rate. Some people manage to counter the offer of one lender with the other to get the rate they want with the lender they want. The other number you can look to lower next to your interest rate is your down payment; determine if the homes you are looking for are eligible for special programs. Some of them ask for down payments as low as 3 percent; on USDA Rural Development Program Loans VA and on Navy Federal Credit Union all offer zero repayment loans.
Invest in DIY.
Fix-top homes and DIY projects have not only fueled HGTV; they also helped many new homeowners quench their thirst for home. Some repairs or renovations are, without a doubt, expensive – replacing a roof or renovating an entire kitchen can be a big upfront cost.
But many homes on the market need a coat of paint – let's say a new coat of paint – or simply have to be adjusted in stages to meet the preferences of # 39, a new owner. Being your own general contractor means that you can spend money simply on materials, not on work or margins, which means more money stays in your pocket. Each improvement will also result in more equity for you, so your hard work will result in the real money earned on the road.
Protect your investment.
One of the prices that sometimes surprises new homeowners is the cost of homeowners insurance. To reduce the cost of a home insurance policy, talk to your insurance company about bundling your home and auto insurance policies at a reduced rate.
You can also protect your domestic investment by looking for credits beyond the purchase price. A common credit is that granted for late repairs, but some people are also able to obtain credits for closing costs or home warranty. All of these options can reduce the overall cost of buying the house.
Look forward to your expectations
If you have been saving for a home for years, you probably have your heart on something very specific: Victorian style, lots of turrets, seats of built-in window for each child, original hardwood floors. But the term "home of departure" exists for a reason – most people need to "trade up" to a bigger house down the line.
It is important to spend less than you can really afford to protect yourself from a crash fellow and be able to save for other priorities you may have, such as retirement or college. Look for what meets your needs and makes you happy – while this 1990's ranch house may seem a little cookie-cutter compared to your beloved Victorians, if it's in a good school district, near the work, and big enough for your family,
The purchase of a home may be less affordable than in the past, but that does not mean that it's a good thing. is impossible. By looking for ways to increase the buying power of money and credit that you currently have, you can increase your chances of buying a home that you can really afford – and be happy to call home.