How to make home buying more affordable
Everyone’s heard that mortgage rates are up and home prices haven’t fallen much, if at all. But still, you know that getting into a fixed mortgage can effectively freeze your payments. That’s one of the many reasons people aspire to be homeowners. But few people consider all the ways that you can make a home purchase more affordable.
If you’re feeling the pinch of housing costs and want to get out from under renting but wondering how you’re going to afford home ownership, I’m going to go through five strategies you can use to make home buying more affordable.
1. Think outside of the box on your home financing
Most people get stuck in the 20% down, 30 year fixed mortgage and they don’t know about other options. The average amount a home buyer puts down is actually 13%, and there are loans that require as little as 3% or 3.5% down.
You can also look at paying points. Points are an upfront fee that reduces your mortgage rate. Here’s a video that explains points and here’s an article that helps you understand whether paying points would be a good decision for you.
2. Consider how to decrease your home price
A lot of people have their heart set on a particular home, but you want to keep an open mind. It could be that the solution for now is to get a smaller square footage home you can expand it later on when you have more money available. Or, consider more affordable, up and coming areas.
A lot of people make a lot of money being frugal when buying a home, and looking for a diamond in the rough – the asset can appreciate more in the future.
3. Take advantage of zoning changes around extra income through a rental unit
Because home affordability is an issue, many municipalities are changing their zoning and allowing renters or auxiliary buildings, such as California or New York. Developers are making a lot of money off of these changes. So you too, might as well use these changes to zoning laws to your advantage.
Even if you’ve never considered having an income property, like a rental unit in the back of, or attached to your home, it’s a great way to offset housing costs. And in the future, you can always decide to take over the entire property when the time is right.
4. Consider buying in a joint partnership with a friend or partner
It’s becoming more common these days to buy a home together with a family member or other relative or friend. People look for investment opportunities, which can take the form of a joint ownership. Another option is to divide one house into two with another family or individual who is also looking to buy.
No matter what sort of joint partnership you are considering, the key is to have a very good legal agreement that clearly spells out what the ownership rights are, etc.
Here’s an article that goes through exactly what you need to know for a joint partnership when buying a home together: “Legal contracts for shared property: what you need to know.”
5. Download my free resource
Use my resource “How to thrive in today’s home financing environment.” It contains my best my best home financing strategies to transform your home buying experience. It tells you how to leverage these available strategies and more to get the best deal.
Think outside the box if you’re feeling stuck, or just want to bring your costs of homeownership down.
Get a copy “How to thrive in today’s home financing environment,” here.
And, here’s a video I made that goes through all five of these points: