I talk to people every day, which is the part of my job I love the most. I've heard a lot of reasons why people, even if they want to get a new home, are afraid to make the commitment of buying a home. I've listed a few of those reasons here and included my thoughts about each of them. This time, I'll list 3 for first time home buyers and next time I'll list 3 for people who already own a home.
I don't think I would qualify for a mortgage.
True, you may not, not everyone does.
1. Have you checked? If not, you should check with a lender before you decide you don't qualify. I've sold homes to people who thought they wouldn't qualify and were looking to rent. If you haven't checked, you don't know. Checking will also help you to know what you need to change to be able to qualify.
2. Why don't you qualify and what can you do about it?
Here are a few reasons people don't qualify for a mortgage.
- Poor credit score - Get a credit counselor like S.O.S. credit solutions and fix it.
- High debt to income ratio - Enroll in a course like Dave Ramsey's Financial Peace to get rid of some of your debt.
- Low monthly income - Check out your local career center to improve your employment opportunities.
I can't afford the down payment for a house.
Saving is hard, especially if you've got a high debt to income ratio. So once you've got got your debt to income ratio under control, (or even while you're working on it) I suggest reading a book called The Riches Man in Babylon. Here's a quick summary:
Another thing that's worth mentioning is that depending on the type of loan you qualify for, you may not have to save a down payment for a home. Here is an article which outlines a few circumstance where you can buy a home with a more affordable down payment. 3 Loan programs that offer freedom from down payments.
I can't afford to maintain a home
Good point. Home ownership costs money. You should expect to budget to save some money each year for home maintenance. Once you've taken the first few steps to become fiscally sound, you should be able to do that. Some homes require more maintenance than others. So make sure you purchase a home that is either newer, or has had a lot of the major systems updated, or consider purchasing a home warranty to cover larger expenses that you may have with an older home.
The truth of the matter is that renting is not a viable option over the long run. Neither is living rent free in a family member's basement. So while there are obstacles to getting a new home, now's the best time to start working on it.