Home buying is often the most important and largest investment someone can make. In addition, this is one of the safest investments someone can make if the right steps are taken to ensure that it is a wise choice.
However, in today’s market, it is no surprise that properties are much more expensive than they were in the past. From increasing living costs to higher taxes, the price of homes can be intimidating for potential buyers.
Fortunately, there are numerous ways to make a home purchase more affordable even in today’s market. Make sure to stay with us and discover five ways to buy a home more affordably in the current market.
How Much is the Average Home Cost in California?
Given that the cost of living in California is 39% higher than the national average, it is expected that the average home costs in California are higher than elsewhere. According to the latest statistics, the housing cost in California is 102% higher than the national average.
As expected, the average cost of a home in California is $708,936. Though things have seen a down of 4.3% for the past year, this is still an intimidating figure for potential buyers.
How to Make Homebuying More Affordable
If you are new to homebuying or are considering purchasing a home in the current market, it is essential to know these five tips to make the home buying process more affordable:
Tip #1: Consider a Higher Down Payment
Most people are familiar with the concept of a down payment; however, it is important to note that making a higher initial down payment can help make homes more affordable in the long term.
By making a larger down payment, the total amount of money borrowed is reduced and this will result in less interest paid over the course of the loan. Additionally, making a higher down payment could help to reduce monthly payments and thus make homes more affordable in the long run.
Also, in a conventional loan, if put up more than 20% of the purchase price for a down payment, you could avoid mortgage insurance. Which again, could help make home ownership more affordable.
Tip #2: Consider Fixer-Uppers
Yes, we all want to buy a home where we can move right in and start living our lives with no additional repairs or renovations. However, if affordability is an issue, a fixer-upper may be a better option.
Not only are fixer-uppers generally more affordable than brand-new homes, but the money saved could be put towards renovations and repairs. This is an especially good option for those who are looking to get into the housing market but can’t afford a move-in ready home.
Fixer-uppers are also a better option for those who want to add personalized touch to their home.
Tip #3: Manufactured Homes
If you are still renting and want to save up money in the long run, then considering manufactured homes is an excellent idea.
Manufactured homes are more affordable than traditional homes and can be customized to meet the buyer’s needs and budget restrictions. Though the upfront cost of a manufactured home may be higher than what one pays in rent, it will save money in the long run as mortgage payments are typically much less than rent payments.
They only take two to three months to build, so you could be living in your own home quickly.
Tip #4: Boost Your Credit Score
Another thing that many often overlook is their credit score. Your credit score is a major factor when it comes to being approved for a loan and the interest rates you may be offered. This can be the difference between a higher or lower monthly payment, which could make your home purchase more affordable.
What you can do is start by understanding your credit score and working to improve it before you decide to buy a home. This is also an opportunity to pay off any outstanding debt and work on reducing credit card debt.
Tip #5: Shop Around for a Lender
There will always be a perfect lender for you out there, but it is essential to shop around before signing any contracts. This will help to ensure that you get the most competitive rates and terms for your loan.
The rule of thumb is to compare at least three lenders and get quotes from each before making a decision. Also, make sure to ask about fees, additional costs, loan amounts, and interest rates.
The Bottom Line
Many first-time buyers fall into the pitfall of thinking that they can’t afford a home in today’s market. However, this isn’t always the case. By understanding the current market and using the tips outlined above, you can make homeownership more affordable in today’s market.
Also, hiring a realtor is essential to help you navigate and understand the process better. While they can be an additional cost, they can also help you save money in the long run. Make sure to ask for their pricing and services before signing any contracts.
If you are in Westlake Village, California, and other nearby cities, feel free to contact Karen Sandvig of Coldwell Bank Realty. Karen is an experienced and professional realtor who can help you find the perfect home for a more affordable price.
With her knowledge and expertise, she can help you find the perfect home at a price that fits your budget.