Becoming a homeowner is still the American dream for millions of young people. But from student debt to low paying jobs, the obstacles are steep.
Here are some ways to get into a starter home a little bit faster.
1. Re-define location, location, location
This real estate mantra used to mean making sure you bought property in the most upscale location possible. Now that notion is being turned upside down. You don’t have to live in a super expensive place like New York City of Palo Alto. Think outside the box and consider cities like Huntsville, (Alabama), Billings (Montana), or Colorado Springs (Colorado), which are often cited as affordable places to live with great lifestyles.
2. Sell something to raise capital.
This is something PwC CEO Bob Moritz talks about in “How to be a Financial Grownup: Proven Advice from High Achievers on How to Live Your Dreams and Have Financial Freedom.” He sold his Firebird, acar he loved but he knew that money would be better spent on his first home. He traded it in for a $500 used car and never looked back. It was a sacrifice, but it also saved him many years of penny pinching to try to save up the down payment.
3. Downsize the down payment.
Putting down less than 20% is an option many people can take, but there are drawbacks. In most cases you may have to pay insurance for putting down less than 20%. But sometimes that insurance is more than paid for by the savings of not paying rent. According to RealtyTrak, about a third of home buyers put 3% or less down when they buy a home. For example, Fannie Mae’s HomeReady allows buyers who qualify to put down just 3%
Get more Real Estate tips in “How to Be a Financial Grownup: Proven Advice from High Achievers on How to Live Your Dreams and Have Financial Freedom” by Bobbi Rebell.