How can aspiring homeowners afford to buy their dream homes faster?
Despite vast portions of the U.S. housing market becoming rentals, the dream of homeownership is still alive and well. Unfortunately, while many would love to buy, they still continue to find their idyllic dream homes just out of reach. Perhaps the perceived down payment is a little too much, the expectation of payments seems a little out of reach, or credit history isn’t spotless. Fortunately, no matter what challenges present themselves, there are likely far more options than many imagine. Perhaps it’s time to stop saying “We can’t afford that,” or “We don’t have that kind of money,” and to start asking “How can we afford it?”
Ten Strategies for Fast Tracking to Your Dream Home
1. Housing Assistance Programs
Contrary to rumors of these programs fading away, many more housing assistance programs have been launched or expanded recently. From coast to coast, municipalities and nonprofit organizations offer an array of grants, subsidies, second mortgages, tax breaks for down payment assistance and help with closing costs. Some even offer extra funds for making home upgrades, and adding energy efficient features which can reduce overall costs of homeownership.
Some of these programs offer six figures in financial help to get into a home. They are available in even the nation’s hottest housing markets like San Francisco, and are even available to those with six figure incomes. This is cheap, if not free money, and should be an option for all to explore.
2. Get the Real Deal on Home Loan Options
There is a huge disparity in what home buyers believe the down payment, credit and income requirements are today. In many cases, buyers have been relegating themselves to the sidelines, missing out on massive home price and interest rate savings, due to believing they would have to come up with more down payment or monthly payments than they really would.
This has hurt them considerably, as others rush in to get the best deals, remove options and increase local rental rates. Ultimately, many renters are paying more to rent than for owning a home, while paying for someone else to own their dream home. Get out and shop for a home loan, and get the real deal on FHA mortgages, VA loans, USDA home loans, stated income programs, and private mortgages.
Some may even seriously consider the advantages of leveraging their retirement accounts to buy a home. With stocks seriously overvalued, and housing headed up, retirement savings could be safer and perform better in real estate, not to mention truly securing somewhere to live during decades of retirement.
3. Buy Now & Grow Equity for a Down Payment
With real estate being a bastion of growth right now, many will find that buying what they can afford now is the easiest and surest way to fast track their dream home through appreciation. Home equity is likely to grow much faster than any savings account and will help buyers keep up with home price increases.
4. Buy a Home and Make it Your Dream Home
Another option is simply buying a home or the lot you can afford now, and taking the time to add improvements and craft it into your dream home or estate over time. With the ability to rehab every aspect of the home, it could be far more rewarding and enjoyable than buying any existing, or cookie cutter builder home.
5. Rent to Own
Many could also find a happy medium in rent-to-own homes. This can be a great option for those afraid they won’t qualify for a bank loan, or who just don’t want to give their hard earned money to the banks, which they feel have done them wrong in the past.
6. Lease Options
Lease options offer a similar solution as rent to own, with the option to buy at a later date. This is great for the pessimists that want to see the value there before they buy or aren’t sure if their plans will change in the next couple years.
7. Seller Financing
Many sellers are offering to finance the sale of their houses today. This can help the seller to reduce tax burden, while selling homes now. For buyers, it can offer immediate access to their dream home, with smaller down payments and attractive rates, again, without going to the bank.
8. Invest in Income Producing Property
Aspiring home buyers could find buying an investment property now one of the best tools for catapulting them to their dream homes. This can provide both income and capital growth which can be used to purchase and maintain a superior residence.
9. Invest as a Private Lender
Even those with modest savings and investment portfolios could loan their capital to other investors as mortgages, gap financing, or in joint ventures to achieve superior returns and grow their wealth rapidly.
10. Improve Your Credit & Finances
If the hurdle preventing you from buying your dream home is credit or your financial standing, it could be worth consulting a mortgage professional now and formulating a real plan for maximizing your appeal as a borrower. This can include improving or rebuilding credit, as well as getting paperwork better organized for making a formal loan application.
Whatever type of home you desire, and no matter what the perceived hurdles, waiting will be counterproductive. Interest rates and home prices easily outpace savings and income growth. Be real about what you really want and need, and find a strategy which can get you there sooner, rather than later.