{"id":6651,"date":"2020-09-29T17:56:39","date_gmt":"2020-09-29T17:56:39","guid":{"rendered":"https:\/\/chenoafund.org\/?p=6651"},"modified":"2024-06-13T14:16:43","modified_gmt":"2024-06-13T14:16:43","slug":"5-tips-to-help-you-afford-your-first-home","status":"publish","type":"post","link":"https:\/\/chenoafund.org\/5-tips-to-help-you-afford-your-first-home\/","title":{"rendered":"5 Tips to Help You Afford Your First Home"},"content":{"rendered":"

Getting started on the homebuying process can be difficult\u2014particularly for first-time homebuyers, who can\u2019t rely on selling a home to help them afford a new one. Fortunately, there are a lot of ways to prepare to afford a home, not all of which involve padding your bank account. Here are 5 tips to help you afford your first home.<\/p>\n

1\u2014Do the Math<\/b><\/p>\n

Online mortgage calculators can be a tremendous tool to help you determine how large of a mortgage you can afford. Just search \u201cMortgage Calculator\u201d and you\u2019ll immediately find hundreds of options.<\/p>\n

How can a mortgage calculator help you afford a home? The tip is in knowing how much a mortgage payment costs. If you look up the price of different homes with different mortgage rates and compare those numbers with your income, you can get a pretty good idea of how large of a mortgage you can currently afford. Keep in mind this oft-repeated advice from the experts: where possible, keep your monthly housing payments (mortgage, insurance, HOA fees, etc) 30% or less of your monthly gross income. If the combined expenses of a home exceed that amount, it\u2019s probably out of your budget.<\/p>\n

2\u2014Research Your Options<\/b><\/p>\n

Having a good working knowledge of what homes cost, what rates are for your credit profile, and what types of homes are available can help you find a home that you can afford. When researching your options, there are a lot of things that you\u2019ll learn and that professionals will suggest you keep in mind, so try to determine what\u2019s most important for you to focus on:<\/p>\n

    \n
  1. What kind of house do I want?<\/b> Many borrowers want the American Dream of a large home with a white picket fence. While many homeowners do manage to achieve this eventually, condos and townhouses often make more affordable starter homes.<\/li>\n
  2. What are the prices and rates where I want to live?<\/b> Where possible, keep a broad outlook on where to live, as that greatly expands your options when hunting for affordable housing. In addition, speak to many lenders and have them quote rates; this can help you find a better deal than just contacting one or two lenders would.<\/li>\n
  3. How big of a down payment do I want to make? <\/b>Many borrowers are unaware that lenders can provide mortgages with only 5%, 3.5%, or 3% down payments required. This goes a long way to help you find a mortgage that you can afford. This does result in an added expense, though\u2014mortgage insurance.<\/li>\n
  4. Should I consider down payment assistance?<\/b><\/li>\n<\/ol>\n

    Some borrowers are able to afford a monthly mortgage payment but can\u2019t afford a down payment right now. These borrowers should consider looking into down payment assistance programs\u2014in many markets borrowers can accumulate more wealth over time by buying a home now rather than saving up a down payment and buying a home later.<\/p>\n

      \n
    1. Do I want an FHA or a Conventional loan?<\/b> FHA loans generally have lower interest rates, but they are also paired with mortgage insurance that doesn\u2019t go away at 20% home equity, while conventional loans are. Or perhaps a USDA loan would be better for you\u2014or a VA? There are many types of mortgage loans, and knowing which kind fits your needs best will go a long way towards helping you afford a home.<\/li>\n<\/ol>\n

      3\u2014Make and Keep a Budget<\/b><\/p>\n

      Becoming a homeowner is an important commitment\u2014for most people, your home is one of the biggest financial investments you\u2019ll ever make. Are you financially disciplined enough to spend within your means and make on-time monthly payments on a mortgage? Making payments on-time and living under-budget are important skills to turn into habits before owning a home.<\/p>\n

      In addition, going through your finances and seeing where you spend your money can help you recognize how large (or small) of a home you\u2019ll be able to afford in the first place. It\u2019s ok if your first home is smaller than you imagined\u2014starter homes exist for a reason.<\/p>\n

      Part of making and keeping a budget includes paying off debts, which has two great benefits. First, you\u2019ll have more income to spare, which will help you afford a mortgage payment. Second, paying off your debts can help increase your credit score, which in turn can help you qualify for a lower rate on a mortgage, and therefore a lower monthly mortgage payment.<\/p>\n

      4\u2014Don\u2019t Set Unrealistic Dreams<\/b><\/p>\n

      As we mentioned before, starter homes exist for a reason\u2014they can be a good training ground for the demands of homeownership. An enormous, expensive home with lots of leaky faucets to fix and a gigantic lawn to care for might sound enticing, but it can easily be overwhelming for first-time homebuyers, even if they can afford it.<\/p>\n

      When hunting for homes, use all of this information you\u2019re collecting to determine a price range, location, and house type that you can reasonably afford, then try to find your dream home there. Many borrowers find it hard to be happy with homes that fit their budget when they go to showings for homes they know they can\u2019t afford, so for most it\u2019s a good idea to only have your realtor take you to visit a home that you should be able to afford if you were to purchase it.<\/p>\n

      5\u2014Be Patient<\/b><\/p>\n

      Believe it or not, even in this crazy seller\u2019s market with homes being snapped up overnight, a little patience goes a long way. Borrowers who rush into purchasing a home can find themselves in all kinds of trouble, including unexpected and expensive repairs, neighborhoods rougher than they expected, or simply financial shock over the unexpected cost of making mortgage payments. Being patient may mean passing up some home opportunities that seem promising, but patience ends with you finding the home that\u2019s perfect for you.<\/p>\n

      Keep in mind that patience comes in many forms\u2014for example, patience doesn\u2019t mean waiting six months to find the exact right home for you if your lease is up soon and you need to move out in a month. In that situation, patience could mean taking the time you need to breath, destress, and take a break before throwing yourself into hunting for homes and good mortgage deals again.<\/p>\n","protected":false},"excerpt":{"rendered":"

      Getting started on the homebuying process can be difficult\u2014particularly for first-time homebuyers, who can\u2019t rely on selling a home to help them afford a new…<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37],"tags":[435],"class_list":{"0":"post-6651","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-chenoa-talk","7":"tag-first-home"},"yoast_head":"\n5 Tips to Help You Afford Your First Home - CBC Mortgage Agency<\/title>\n<meta name=\"description\" content=\"Discover essential tips to afford your first home with expert advice from Chenoa Fund, guiding you through the process of homeownership.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/chenoafund.org\/5-tips-to-help-you-afford-your-first-home\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"5 Tips to Help You Afford Your First Home - 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