That is the question that many young people today continuously ask themselves. With job issues, spiraling education, food and gasoline costs, many people are barely able to pay their normal living expenses. And this makes it hard to ever consider whether or not they will ever be able to afford a home. The reality is that just about anyone can buy a home, but only if they commit to the proper courses of action and the strategies to get themselves ready for home ownership.
The process starts by realizing that homebuyers have some general characteristics in common. For one, they are typically people who diligently pay their bills on time every month, so make sure that you attend to those bills. This way, you don’t have to pay late fees, which can cause you to suffer from negative credit marks put on your credit profile, reducing your credit score and ability to purchase a home.
One thing that can help you to pay your bills on time is to reduce your unnecessary expenses. Buy what you can afford and need, and not necessarily everything you want. You also need to be smart about buying and shop around a little to find the best deals.
For example, let’s say you are considering buying a new car, which would be one of the more expensive necessities in life. Weigh out your options before committing. Do you really need the expensive car with the luxury interior? Or one that also uses premium gasoline, costs more for oil changes and service, and gets really low gas mileage? And did you look at used cars, which could be significantly less expensive? And what about shopping around for the best financing from a local bank or credit union, instead of just taking what the salesperson talks you into accepting?
With a big expense like your automobile, if you do not live within your means, educate yourself, and do some research before you buy, you will be spending more than you should and that will reduce your chances of being creditworthy to buy a home in the future.
And it isn’t just a car. Consider whether you need the premium cable channels too, because CATV bills can easily run $100-plus dollars per month. In addition, cell phone bills, water bills, and electricity should all be reviewed to see where you can save more. Also consider your other expenses. Do you eat out all the time when you could save a lot of money by eating at home? Do you go to the movie theater every week when you could just rent something for cheaper? Now might be a good time to think about what expenses you can eliminate or reduce.
Homebuyers also have consistent employment income. This means being at the same job for at least two years, and the longer the better. It doesn’t have to be the same company, but should be in the same employment field. Even if you do not earn that much money, you may still be qualified for a loan for a reasonably priced condominium or house. But if you do not have steady income and decent credit, you probably will not be able to get a loan.
Finally, you need to start saving some money for a downpayment on a home if you're not already doing so. This could be as little as starting with $50 per month set aside in a separate bank account. The important thing is to start the process and learning about saving and investing. FHA mortgage financing can be obtained with only a 3.5% downpayment, plus fees. This means that if you bought a $75,000 property, you might only need $4,000 to $6,000 dollars to close escrow on it. And your total housing payment may be equal to or possibly even lower than your previous rental payment. Most people should be able to save that amount of money over a few years if they really work hard to do it. The downpayment also may be able to be a gift from your parents, but you’ll still need the good credit and income to qualify for a loan.
The fact is that thanks to a generally stable U.S. economy and government support, housing in the U.S. is some of the most affordable housing in the world. Government agencies provide inexpensive and generally easy-to-get financing for people who use credit judiciously and save a small amount for a downpayment.
That means the answer to “Will I ever own a home?” is that if you want to own a home someday, with hard work and determination, you can achieve that American Dream.
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