With the recession still not long behind us, many Americans are deferring homeownership for longer than they did in the past. If you still have not purchased your first home, you too may be holding off because of some of the financial obstacles you face.
Below are some common barriers to purchasing your first home and some suggestions for overcoming them.
Buy a Home in Florence, AL
- You cannot afford the down payment. If you still do not have a large pile of savings, putting a sizable down payment on a home may stretch your finances too far, or might be outright impossible.Thankfully, there are government-backed loan programs which can minimize your down payment. With an FHA loan, for example, your down payment could be only 3.5%. With a VA loan or USDA loan, you may be able to purchase your first home without any down payment at all. There are also 3% conventional loans to consider. Also look into state programs like the Mortgage Credit Certificate (MCC) and Alabama Step Up.
- Your credit is low. As a first-time home buyer, you also may not have a high credit score yet. But this does not need to stop you from purchasing a home with an affordable mortgage. Here too, programs like FHA, VA and USDA can come to your rescue.
- Your DTI isn’t ideal. If you are just starting out in your profession, chances are good that your income is low and your debts are high. A less than ideal debt-to-income ratio can make it a challenge to qualify for a home loan. You should take steps to try and improve your DTI. A credit counselor may be able to help. In the meantime, see if you qualify for a USDA mortgage. This product is aimed specifically at homebuyers with lower incomes. You can also look for someone you trust to cosign on your loan.
- Housing is getting more expensive. One more challenge which is far more difficult to overcome is the rising cost of housing in communities across the country. Obviously, the pricing of homes is out of your hands. You can, however, still shop for the most affordable mortgage to try and keep your costs down. You can also look into purchasing a fixer-upper.
Let Us Help You Overcome Any Barriers to Homeownership
If you are having a difficult time affording a home, you may be surprised what you qualify for with the right mortgage broker in the Tri-Cities on your side. Especially in our area, there are many excellent opportunities for USDA home loans and other affordable mortgage programs. To schedule a consultation now, please call (205) 495-0313. We look forward to getting you into your first home in the Shoals.