Happy New Year everyone! I hope you all had a great holiday season and are looking forward to a great 2018. I want to jump right out of the gate and ask you a very simple but serious question. Are you still renting? If so, make educating yourself and stepping into the housing market a top priority of the year for you. Home ownership not only increases your net worth, you also get a tax breaks and most importantly it allows you to lock in your living expenses. If you don’t take some serious steps towards home ownership now, it’s a very real possibility you’ll be stuck in a perpetual renting feedback loop.
Think about it. Every year when your lease expires one of two things tend to happen. Your building will want to increase your rent or you will need to look for a new place to live to keep your rent lower. While moving every year may technically allow you to keep your rent lower there are certainly moving expenses to consider which add up, not to mention the time and energy it takes to change all your billing addresses etc.
Couple all this with the fact that wages are simply not keeping up with inflation, especially when it comes to living expenses. A large majority of the population are hardly receiving cost of living increases despite the gains we’ve been seeing in the economy. This can also lead to folks constantly job hopping looking for higher paying jobs just to keep up with inflation. The result is no one ever really feels truly settled in their position so the thought of even making plans to buy a home can be daunting, especially when there is a lot of misunderstanding among home buyers of what it actually takes to buy a home in today’s market.
The good news is you are actually able to jump into the housing market sooner than you think. Here are a few things to consider immediately as your planning your 2018.
- Be realistic. Your first home is not going to be your forever home. You’ll likely need to make some concessions on location or amenities but you’re building towards your future. This home is going to be a huge stepping stone to get you that much closer to your dream home.
- Your first call should be to a local loan officer who will be able to take a look at your finances and help educate you on your purchasing options and most importantly price range you should be looking in.
- You don’t need 20% down to buy a home. This is something you’ll discuss more in depth with the loan officer but there are programs that go as low as 3.5% down so home ownership may be much closer than you think.
- You don’t need an 800 credit score to qualify for a loan. If you’ve had some credit trouble in the past it’s important that you discuss it with your loan officer. There are strategies and tips that can potentially get your score higher if needed. While lending standards have tightened up since the crash folks who have scores in the upper 600s are still getting approved for loans.
Just laying down this base knowledge and having that initial conversation with a loan officer will make home ownership much more of a reality than you ever thought it could be. Remember this is all about you. Your dream, your home.