Home ownership is the dream of many families. They understand the futility of paying rent indefinitely. Although this helps to put a roof over your head, why should you continue to pay for someone else’s property?
Some people continue to rent because they do not think that they are financially able to purchase a home. If you are one of these people who think that you are not able or ready to buy, uou may be closer than you think. There are some simple steps that you can take to put home ownership within your reach.
Calculate The Cost
The apartment guide calculated that the average price of rent for a one bedroom apartment across the nation comes in at approximately $769. Because this is the average, this means that there are places that are significantly higher, as well as places that are significantly lower.
What you get for this price, depends on where you live. For example, in Springfield, MO this will get you approximately 1,059 square feet, but if you want to live in San Diego you will have to squeeze into approximately 420 square feet. No matter how much space you get, when you are renting, the space will never belong to you.
If you are already paying rent, you owe it to yourself to calculate how much house you could afford for what you are already paying out. Unlike a rental, a mortgage comes along with additional expenses that are due in addition your monthly payment. Some of these are:
- Property taxes
- Homeowners insurance
- Homeowners association dues
- Maintenance and repair fees
Use an online tool such as myhomeloantools.com to plug in your numbers to get an idea of how much house you will be able to afford.
Review Your Credit
The time to review your credit is before you begin to apply for home loans. This is the time to clean up any inaccuracies that your credit report may contain, as well as prepare an explanation of any dings that your credit report may have. If there are significant dings, many lenders will require that you submit a written explanation prior to them approving your loan. You can receive a free report from www.annualcreditreport.com.
Cleaning up inaccuracies is not as hard as you think. There is no need to pay a credit repair company to do it for you. It is as simple as reporting the discrepancy to the credit bureau and asking for a review. Once they have reviewed it, they will contact the creditor. If the creditor does not verify this information within 30 days, they must remove the damaging information from your report.
Consider Expanding Your Choice Of Locations
While you may dream of the big house on the hill that keeps your commute under ten minutes, that may not be a reality. In most cities you will pay higher prices to be in the heart of the city. If you are willing to expand your choice of locations during your search for a home, you may find out that your dollar will go much further, the farther you get from the city. Be careful that you do not shoot yourself in the foot, and spend all of the money that you are saving on commuting costs. Look for a location that will give you a happy compromise.
Do Not Let The Lack Of A Down Payment Stop You
One of the hurdles that many potential homeowners see is the lack of a significant down payment. While a down payment of anywhere from 5 – 20% of the purchase price of the home may be required by many lenders, there are programs for first time home buyers that require no down payment at all.
For example, the United States Department of Agriculture (USDA) offers guaranteed thirty year loans for single family housing in certain areas. These loans are especially designed to make home ownership a reality for low to moderate income home buyers.
Do not continue to pay for someone else’s property when you can invest in something that will belong to you. Realize your dreams to own a home. Click here to learn more.