There are hundreds of thousands of people who believe that they can't currently afford to buy a home for one reason or another. Some people may not be able to, but a surprising amount can and have simply gotten some bad information along the way. It's worth digging a little deeper to find out the facts.
Consider this example: John and Karen have been renting a home for the last five years at $2,000 a month. During that time, the home's value increased by $30,000 in value, while the unpaid balance decreased by $18,400. While they were fortunate that the rent remained constant over the five years, they missed out on close to $50,000 of equity that the owner realized instead of them.
Another thing to consider is that with today's low-interest rates, it is quite common for a mortgage payment to be lower than a tenant is paying rent for a similar property. So, in this example, John & Karen paid more to rent than a house payment would have been and missed out on the equity build-up that occurred due to appreciation and amortization.
The simple fact is when tenants like John and Karen pay their rent, the landlord is the beneficiary of the rent received, and the equity earned. Over time, the rent paid by John and Karen and other tenants will pay for the landlord's rental. It a great concept and a good investment.
It's true; not everyone can afford a home. A buyer needs money for a down payment and closing costs. They also need to have income and good credit to qualify for the mortgage. Some of these may seem impossible but instead of imagining that buying a home is not in the cards at the current time, talking to a real estate professional is a better route to take.
There are many low down payment mortgages available, including 100% financing for qualified veterans and USDA eligible buyers. It is sometimes more difficult to find sellers willing to pay all or part of a buyer's closing costs when inventory is low, but lenders do allow it. It is a matter of finding a willing seller.
The down payment source could be a gift from a family member as long as there is no repayment expected. It's amazing how many parents or grandparents might help a relative get into a home. Funds for a down payment may be available as loans or withdrawals from qualified retirement programs like IRAs or 401k plans. It's worth investigating based on what retirement programs you have.
Good credit is necessary to qualify for a loan, but buyers should not assume that theirs is not adequate. A trusted mortgage professional can assess a situation and may be able to suggest some things that will not only raise the score enough to be approved but possibly, even raise the score enough to qualify for a better interest rate.
There are many misunderstandings about whether a person can or cannot qualify for a home at this time. Instead of relying on second-hand information or something floating around on the internet, talk to a real estate professional. They can give you the facts, assess your situation and, if necessary, point you in the right direction to get help from a trusted mortgage professional. Call (479) 575-0000 to schedule an appointment. We'll help you dig deeper to determine whether you can buy a home now.