By: David Ludlow
Most Americans dream of owning a home, and it’s not hard to understand why. Homes represent stability and wealth—even owning a modest home in a low-income neighborhood is a big step up for many American renters, renters who appreciate the stability of monthly mortgage payments over increasing rent, and who appreciate having the control to do whatever they want with their house. Unfortunately, many Americans, even though they dream of owning a home, don’t believe that they will ever become a homeowner.
Many unique challenges prevent people from even looking into buying a home; you’ve probably heard many of these challenges before, or may be living one. A very common challenge is money: Rising rents and other living expenses make it difficult or impossible to save up. It can be very hard to create savings as a single parent, or as someone who has to pay large medical bills. Student loans and other debts can make people feel trapped. People find other difficulties based on their stage of life: Young couples may be afraid of the commitment a mortgage represents, or afraid of settling down. Couples nearing retirement who have never owned a home may not believe that they would be able to afford a home on retirement income.
These examples of challenges come from many of the people we at CBC Mortgage Agency have helped become homeowners. These people had high aspirations for where they wanted to go in life, but difficulty homing those aspirations, so to speak.
So when is it time to buy a home? How did these people take their unique situations and put themselves where they needed to be to accomplish their dream?
There’s no simple answer to knowing when to buy a home—but putting yourself in the right situation will help you be ready when opportunity arrives. These three steps can help you prepare yourself to become a homeowner:
1) Want to own a home. The first step is the simplest, and you’re probably already there if you’re reading this article. If you want to own a home, let that desire compel you to act. In particular, set realistic goals and write them down—“Spend thirty minutes weekly researching the local housing market” is an example of a specific goal you have direct control over. You could start on websites that list houses, like Zillow, or by looking up real estate blogs about your area.
2) Educate yourself. There are many benefits to educating yourself on how mortgages, house hunting, and homeownership works. One benefit is the confidence that comes with knowledge. Another is an awareness of all the tools at your disposal. Consider doing the following:
- A) Research the benefits of owning a home versus renting—this can help you overcome concerns you have about the risk of being a homeowner.
- B) Research how mortgages work—just a little bit of research can show you that mortgage payments are often the same as rent, or lower. Even if a mortgage payment is a little higher than rent, mortgage payments accumulate wealth, while rent never does; seeing how this wealth accumulates over time will help motivate you.
- C) Contact lenders and realtors in your area—they can help you find out what price range you can afford and where to look for homes. They can also point out ways to improve your financial or credit situation, or resources to get financial help and advice. Most lenders and realtors can be contacted online, which may feel more comfortable if you don’t want to set up an appointment or phone call.
- D) Research payment assistance options in your area—from down payment assistance to rent-to-own, most states and cities have a large variety of programs that want to help you, affordably and responsibly, become a homeowner. As an example, Chenoa Fund down payment assistance operates in every state except New York and has low entry requirements.
3) Maintain Awareness. This step is essentially a continuation of the above two steps. If you want to own a home, and if you continually strive to educate yourself about the housing situation in your area, and what assistance options are available to you, and what lenders will be best for you, then you have put yourself in the best possible situation to know when a home within your budget is on the market and what resources you have to get that home. The best part is, once these pieces slide into place, most Americans, even those in difficult situations, realize that they found their time to buy a home.
If you do your best to follow the above steps, there’s no guarantee that you will find a home to buy tomorrow or even in a few months. But you will know that these steps are working for you when you find confidence and purpose in your dream of homeownership; you will grow in knowledge of what responsible homeownership looks like and where you can find resources to help you, and you may even make contacts among realtors or lenders who can help you find a home and then buy that home.
And, if you are in a difficult situation, you will know these steps are working for you when you find an assistance program that meets your specific needs. For example, if you don’t have enough savings for a down payment, consider Chenoa Fund down payment assistance, a program offered by CBC Mortgage Agency. Chenoa Fund provides 3.5% DPA assistance on FHA and conventional loans and accepts borrowers with FICO scores as low as 620—often the exact bump someone needs to become a homeowner.
So when is it time to buy a home? If you keep yourself educated and up-to-date, you will know when the opportunity comes for you.