Home buying hurdles exist — but research, creativity and flexibility will help you clear them.
The first step to knowing if you can afford a home is figuring out what financing options are available to you, including what mortgages you’re eligible for and how much you need/can afford to put down upfront.
Fannie Mae discovered that most buyers don’t know the minimum FICO score required by lenders and that 49 percent of buyers don’t even know what their credit score is.
Before buyers even start thinking about saving for a home, they should know what their financial resources are and if they’re eligible to buy.
According to the Zillow Group Consumer Housing Trends Report 2017, renter households typically earn a median income of $37,500 annually, which is $50,000 less than the median household income netted by households who recently bought a home (of whom the median household income is $87,500 annually).
While there are ways to enter into homeownership without making $87,500 in household income, it’s hard to afford to buy if you make significantly less.
The down payment.
In fact, two-thirds of renters cite saving for a down payment as the biggest hurdle to buying a home, according to the Zillow Housing Aspirations Report.
“The down payment remains a hurdle for a lot of people,” says Gudell.
In fact, only one-quarter of buyers (24 percent) put 20 percent down, and just over half of buyers (55 percent) put less than the traditional 20 percent down.