A key focus of my blog is Money/Financial Literacy. The most significant financial purchase many people will make is that of buying a home. It can be done without being what’s considered a high earner though. The following contributed post is entitled, Becoming a Homeowner Without Being a High Earner.
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Let’s not kid ourselves; becoming a homeowner is a financial priority shared by most people. While I personally think renting can be great for young adults who might not wish to settle down just yet, the benefits of buying a home are huge. The property will become your biggest asset and it also gives you the freedom to decorate without asking your landlord. You will also remove the threat of being replaced by another tenant.
As my good pal Mike loves to state too: “It’s better to pay your mortgage than someone else’s”. But the current housing market is particularly tough, making it hard for first-time buyers and applicants who are not high earners. However, as Mike also likes to say: “When the going gets tough, the tough get going.” Although I’m pretty sure he can thank Billy Ocean for that one. But I digress.
When looking to step onto the property ladder, it’s important to acknowledge it might not happen right away. It may take time to save for a downpayment, secure job stability, and find the right home. So, it’s important to take financial responsibility right away. Firstly, I would suggest researching any government schemes in your region. There are several that are designed to help first-time buyers and low-income applicants get on the ladder. They do vary between states and countries, but a little research should point you towards them.
Whether it’s free financial boosts to savings accounts or tax breaks, all forms of support are a step in the right direction. I would also suggest that you consider budgeting and improved money management. Avoiding unnecessary debts like store cards can be very useful too. Short-term sacrifices will often allow you to step onto the ladder sooner.
Perhaps my best piece of advice, though, is to start looking for affordable housing. Developments like The Millennia Companies move at Cleveland’s Huntington Building are a great example. When homes are aimed to support affordable housing schemes, your hopes of securing a property with a lower income are improved. Meanwhile, some prospective homeowners should consider where they want to live. Some cities are more affordable than others. Also, neighborhoods based on the outskirts are usually more affordable than living in city centers.
Mortgage lending is influenced by your income as lenders use this to determine how much they are willing to lend you. With this in mind, joint mortgage applicants will be offered a bigger amount as long as you both have a solid income and have your debts under control. I would suggest that you use a mortgage calculator to test out the different options available to you. And, of course, you should not enter a commitment of this size unless you are 100% comfortable.
The great news about preparing for a mortgage application is that it teaches valuable financial habits too. For example, Experian credit score boosting will help you with all future credit agreements. Whether it’s car purchases or personal loans, this strengthens your finances. So, even if the home purchase doesn’t go to plan, you haven’t lost out.
Crucially, if you want to buy a home, now is the time to start the journey. The sooner you do, the sooner you can turn your dream into a reality.
