*NOTE: Please see information on down payment assistance and help with your closing costs, at the bottom of this post.
Though buying a home is indeed a major decision and you want to consider it carefully, buying THE home might better be reserved for your second or third real estate investment.
Look at it this way. As a renter, the place that you live is someone else’s property. You never really have the feeling that it’s home, you have no investment, you will realize no profit, you can’t make alterations or make it yours in any way. Did you compromise when you chose this place to rent? Is it exactly where you wanted to be? Does it have every feature on your checklist? Enough bedrooms or baths? Are the rooms large enough? Maybe not, but you’re willing to adjust your expectations because you won’t be living here forever.
When you invest in your first property, and perhaps even your second, you would be wise to approach the process with the same logic that you applied to finding a house to rent. By all means make a wish list, but then decide where you can compromise to satisfy your most important objective… owning your own home. Maybe the extra 10 or 15 minute drive to work gives you time to plan your day. The kids might enjoy decorating their own side of a shared bedroom. The yard may be small but are you near a community park, pool or play area?
What’s the take away here? When you buy a first or second property of your own, consider yourself one step closer to your dream home. This is YOUR investment, you can do with it what you like, you can make it completely your own, you will pocket all the profit when you sell. That profit provides the down payment for your next home a little closer to work, with separate rooms for the kids or a luxurious master bath, a more spacious family room for that big screen TV, and a pool-size or pet-friendly yard.
Making Homeownership Work on a Budget
By Jonathan Deesing
For low-income families, buying a home can seem out of reach. On top of financial stress, the competitive market may make buyers feel like they will never find a home they can afford. If you dream of buying a house but have lost hope because you don’t think you can afford it, don’t give up. There are several things you can do to help make your dream of buying a home into a reality.
Search in More Affordable Neighborhoods
When trying to buy a house in a competitive market, you might see high-end houses snapped up in minutes. In order to avoid bidding wars and having to either walk away or agree to a price way outside your budget, consider looking at areas with less interest. This includes neighborhoods you may have written off—you may find a hidden gem in an area you originally ignored.
Consider neighborhoods farther away from downtown, which often have lower house values. You could get more bang for your buck in terms of home size and outdoor space in these areas. Some neighborhoods on public transit lines may end up being quicker commutes than areas closer to downtown metros.
Save for Amenities
If switching neighborhoods isn’t an option, scale back on your must-have list. A great home doesn’t have to come with all the bells and whistles and you can save up to make gradual improvements after you purchase your home. Several aspects of residential properties can increase the value of a home:
- Large yard
- Landscaping
- Brand-new appliances
- Finished basement
- Renovated kitchen and bathroom
Houses without these characteristics are often less expensive and a good place to start when looking for affordable homes.
FHA Loans
FHA loans are mortgages approved by the Federal Housing Administration (FHA). Borrowers only need 3.5 percent of the total price for a down payment and a minimum credit score of 580. These kinds of loans are helpful if you can’t afford to save tens of thousands of dollars for a down payment. Even if you have recently gone through a bankruptcy, you might still qualify for an FHA loan.
Additionally, you must meet a number of other requirements to qualify for an FHA loan.
Reduce Utility Expenses
Owning a home comes with additional costs you should consider, especially if you’re moving to a house from a rental apartment. Not only do you need to pay a mortgage and save for a down payment, you’ll also have higher utility bills, and any repair bills fall on you. Maintaining the day-to-day aspects of a house can be expensive, but there are ways to cut these costs.
Several states and utility companies have programs to help low-income residents pay for services. These programs include energy assistance, utility assistance, housing initiatives, and more. Other options such as Access from AT&T provide low income households with internet service for as low as $5 a month. Some states even provide cell phones for low-income residents.
Be sure to do research on what programs are available for low income families at both the state and federal level—most states have numerous forms of income-qualified assistance programs.
Other Government Assistance Programs
There are dozens of programs available to assist low-income families with dreams of buying a home in the near future. Some programs are available through the U.S. Department of Housing and Urban Development (HUD), while others are funded through different government branches.
Difficult finances shouldn’t keep you from living in a home suitable to your family’s needs. There are dozens of options available for individuals from all backgrounds. If you would like to reach your dream of owning a home, investigate your options and find what works for you.
This post was originally published on RISMedia’s blog, Housecall. Check the blog daily for top real estate tips and trends. Reprinted with permission from RISMedia. ©2016. All rights reserved.
⇒ There are still down payment assistance programs available in Maricopa and Pinal Counties. These are grants, NO repayment necessary. Call us for details: 602-999-0952
We also have options to help with your closing costs. See the links below or feel free to call or email for additional information: 602-999-0952 / golfarizona@cox.net
Learn more about the Arizona Heroes Home Advantage cash-back program. NO cost, NO pre-registration, NO obligation.
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Other Valuable Resources
AZVHV – Arizona Veterans Helping Veterans
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