Overcoming Homeownership Hurdles
Spring is home buying season. Of course, one can purchase a home in any season, but supply increases in the spring as families look to move over the summer and avoid school disruptions. If the many “For Sale” signs popping up around town have you considering a home purchase, you will need to start planning your finances.
Here are some tips to help you prepare for your big move.
Set a budget that is appropriate for you now and in the future. The last few years have been very good for the trades. Your income may have been higher than the average norm. As we look forward with an economy that is normalizing, it’s important to have realistic expectations of what your income might be over the coming years. With fluctuating incomes, it’s always best to budget conservatively.
Create a financial plan. There are many expenses that come along with homeownership. In addition to your mortgage, utility bills, insurance, and taxes, you’ll want to save for home maintenance and repairs as well as emergencies. Factor in your lifestyle, too. Are you planning any changes to it, such as starting a family? What other goals do you have besides owning a home?
Explore all options for down payment assistance. Saving for a down payment is often a challenge. Fortunately there are many programs available to assist you. Reach out to your union to see what homebuyer opportunities may exist. They frequently offer benefits for first time homebuyers, such as reduced down payment requirements and closing costs. They may also have a partnership with a financial institution to provide counseling and assistance.
Research your mortgage options. Be sure to look into all options that may be available from various lenders. There may be programs available for your specific situation. For example, many tradespeople are respected veterans. A Veteran Affairs (VA) home loan offers exclusive benefits for veterans, including competitive rates, minimal costs, and no down payment, to honor our military service members. If you have a lower credit score or down payment limitation, you may be eligible for a Federal Housing Administration (FHA) home loan. If you plan to buy in a rural area, you can look into a USDA loan. All of these government-backed loans are designed to help more Americans achieve the dream of homeownership.
Get pre-approved for a loan. Once you decide which type of loan is best for you and your family, work with your banker to get pre-approval. Being a pre-approved buyer offers several advantages. You’ll know exactly how much you can spend, which will save you time as you narrow your search. It also gives you a leg-up over other buyers, which is a big advantage in today’s competitive real estate market. Being pre-approved demonstrates to sellers that your finances are in order and you can afford the property. Sellers don’t want to spend time in negotiations only to have the deal fall through for lack of financing.
Owning a home is the single most impactful life decision when it comes to building equity and creating generational wealth, yet it feels out of reach for many. At Midwest BankCentre, we work hard to ensure that homeownership is accessible for all. This means meeting you where you are to get you where you want to be. We offer home loan options for a wide variety of financial needs, including 100% financing. Our experienced mortgage specialists get to know your specific needs and goals and create a personalized mortgage solution that’s right for you and your family.
The hurdles to homeownership may not be as big as you think. Visit MyHomeLoanSTL.com to learn more or have one of our trusted mortgage lenders contact you to discuss your options.
Originally published in Labor Tribune's March issue of 2024 by Wes Burns, EVP of Community and Economic Development.