Affordability Strategies for First-Time Buyers
While seasonal trends are slowing the pace, home prices continue to rise in many markets. Fortunately, there are ways to minimize the costs of homeownership, especially for first-time buyers with flexibility.
If you’re interested in making the jump from being a renter to a buyer but don’t have the budget for your dream home, innovative options still exist. So begin your journey to a forever home with a first step toward building equity that better fits your circumstances.
Much of the demand driving the current seller’s market is homebuyers looking for additional space inside and out. While single-family homes with large yards are high on most people’s lists, smaller condos or townhouses have not seen the same jump in value. This is particularly true in larger cities where the interest in being close to downtown has declined as remote work has increased.
While this trend is likely to be cyclical, it presents an opportunity for first-time buyers who don’t require much space. If you’re currently renting an apartment, the shift to a new home with shared amenities and walls may not seem to be a dramatic change. However, in the face of increasing rental costs, a mortgage can stabilize your housing costs and help you build wealth. In addition, owning a condo or townhouse for several years before making a move to a single-family home could shorten your path to finding the perfect property.
Sharing the Cost
First-time buyers who only need space for themselves can also take advantage of their minimal needs in another way. While a larger home may tighten your budget more than you’re comfortable with, a roommate can offset some of the expense.
You can target your search for a home to identify properties that lend themselves to space sharing. For example, split floor plans or multiple rooms with ensuites can give you the advantages of homeownership without bearing all of the cost on your own. Just be sure to do your homework when it comes to the lease agreement so you can avoid the pitfalls of being a landlord.
Regardless of what direction your search for a first home takes you, don’t overlook the buying programs designed just for you. In some cases, federal and state programs may offer down payment assistance or tax incentives specifically for first-time buyers. Although, these programs may have price, credit score, or geographic restrictions to consider.
Be sure to spend time researching your options and ask your lender about any options that may make buying a home now even more affordable. You could be pleasantly surprised by what you find.
Start your home buying plan by speaking with a lending expert at Open Mortgage. Explore your options and the steps to get started, or browse our website for more resources to help guide your search.