Top Tips for Making Your Dream of Buying a Home Come True
Planning to buy your dream home this year? Exploring homes for sale in Corpus Christi?
Buying a home can be a major life goal for many people. A recent survey revealed that 80 percent of Americans consider purchasing a home to be a priority, and 28 million of them have plans to buy within the next year. This interest in homeownership is justifiable due to the various financial and non-financial advantages that come with it.
Despite the significant number of Americans planning to buy a home in the next 12 months, it is unlikely that all 28 million will be able to achieve this goal, mainly due to the challenges that can arise when purchasing a home.
When respondents were asked in the aforementioned survey, “What factors are currently hindering you from pursuing homeownership?”
- 30 percent answered, “My credit score”
- 34 percent answered, “I don’t have enough saved for a down payment”
If your goal this year is to buy a house for sale in Corpus Christi, here’s what you need to know in order to accomplish that aim.
Save for Your Down Payment
Typically, a significant portion of the initial payment for a home is made in the form of a down payment. When purchasing a home, the buyer typically provides a certain amount of money upfront as a down payment, and then secures a mortgage to cover the remaining balance.
There is a common misconception that a 20 percent down payment is necessary when buying a home. However, this is not always the case. The National Association of Realtors (NAR) reports that the median down payment for an average buyer is 14 percent while for first-time buyers, it is just 6 percent.
Regardless of the amount of money you are able to save for your down payment, you need not worry since there are different forms of assistance available. By consulting with a local lender, you can learn about different options that can help you reach your down payment target. In addition, there are several loan types such as FHA loans, which offer down payments as low as 3.5 percent for certain buyers, as well as VA and USDA loans that require no down payment for eligible applicants.
In addition to assistance programs and alternative loan types, here are some additional suggestions that may be helpful as you work towards saving for your down payment:
- It is important to consider closing costs when planning for a home purchase. In addition to the down payment, closing costs typically amount to 2-5 percent of the home’s purchase price.
- It is important to maintain your savings even after you have accumulated enough for the down payment. Your down payment should not completely drain your savings, as it is equally essential to set aside funds for the expenses that come with homeownership after you move in.
- Take the time to weigh your options and seek advice from a trusted advisor for professional guidance. Conduct thorough research and ask pertinent questions.
Improve Your Credit Score
Your credit score is a metric that reflects your financial dependability to lenders. Generally, a higher credit score translates to more significant borrowing power and better interest rates. If your credit score is hindering your ability to secure an affordable mortgage, there are measures you can take to enhance it. Here are two suggestions:
- Timely payment of bills has a positive impact on your credit score, while delayed payments can negatively affect it. To make paying bills on time more manageable, consider setting up automatic payments wherever possible.
- Diversify your credit portfolio. Having various types of credit, such as auto loans, credit cards, and mortgages, can enhance your credit score.
Looking to buy a home for sale in Corpus Christi and concerned about getting a loan approval? Our efficient and caring Sales Counselors are here to help guide and assist you throughout your home financing process. Click here for more information.
Sources:
“Home Shoppers to Face High Rates, Economy With Resolve,” Nerd Wallet, https://www.nerdwallet.com/article/mortgages/2023-home-buyer-report
“Highlights From the Profile of Home Buyers and Sellers,” National Association of Realtors, https://www.nar.realtor/research-and-statistics/research-reports/highlights-from-the-profile-of-home-buyers-and-sellers
“Federal Housing Administration (FHA) Loan,” Finance Strategists, https://www.financestrategists.com/mortgage-broker/fha-loan/
“Single Family Housing Guaranteed Loan Program,” U.S. Department of Agriculture, https://www.rd.usda.gov/programs-services/single-family-housing-programs/single-family-housing-guaranteed-loan-program
“How to Improve Your Credit Score Fast,” Investopedia, https://www.investopedia.com/how-to-improve-your-credit-score-4590097