Budget to Buy a House
Given the housing market perception that began in the last decade, it’s understandable why so many Americans believe renting is the more affordable option over buying.
However, a report from the National Low Income Housing Coalition has concluded those who work full-time at minimum wage are unable to afford the rent for even a two bedroom apartment in the United States. Therefore, it may be time to check if the scales have been tipped in favor of buying for many Americans.
There is no payoff when you are renting, other than not having the responsibility of a mortgage. If you are paying more than you would with a mortgage, then it’s not really a responsibility worth avoiding. For those who can afford to buy now, it is likely a good idea to at least explore what it would take to buy a home. The homes you can afford this year may increase in price and financing could become harder to secure. Additionally, it is also very likely new homeowners will begin to see the payoff from buying within as few as four years.
Invest in You, Not Your Landlord
It cannot be stressed enough that there is no Return on Investment (ROI) on paying rent. All that money you pay every month in rent can help you improve your credit score, allow you to save, or work as a stopgap when you are not where you need to be in your career. However, once you are in a position where you can afford to pay a mortgage instead, all you are doing is paying a landlord what you could be investing towards your own financial freedom and a home you can call your own.
Down Payment Assistance (DPA)
Galaxy Lending Group can provide advice on down payment assistance. DPAs are designed to help you afford a down payment on a home, as the name suggests. When you consider the ROI when using a DPA is much higher than normal because you are not using your own money, it sure beats the zero ROI from giving your money to a landlord. There are a number of programs you can take advantage of depending on your circumstances and how much you have to put down as an initial payment out of your own money.
At Galaxy Lending Group, we invest our time in people. As a lender we are more than willing to help you discover how DPAs and other types of assistance programs can provide you with the initial equity to get on the property ladder and start investing in your own future.
Getting prequalified through a reputable lender such as Galaxy Lending Group is actually part of your budgeting strategy. It is impossible to know what you can afford through “guesstimation,” which is why getting prequalified is the first step towards homeownership. Within minutes you can find out how much you are able to afford when it comes to paying a mortgage; which will also give you an idea of the properties that are in your price range. Galaxy Lending Group can then use that information to provide you with loan options based on your specific circumstances and finances.
Playing the waiting game will only result in you watching as house prices rise causing the margin for opportunity to slip away. When you prequalify, it is important to act quickly. At Galaxy Lending Group we understand buying is not the best option for everyone, which is why we prefer to follow up on the prequalification results with tailored advice to the needs of the individual or couple.
Mortgage vs Rising Rent
No matter which way you look at it, rent is just as unpredictable as paying a mortgage. However, the good news is that lending is much more regulated than it was prior to the property bubble bursting in 2007. For borrowers, this means when you receive financing, it is based on very strict guidelines which are designed to protect you. At Galaxy Lending Group, we are committed to furthering that protection by providing loans that are tailored to the borrower’s circumstances. A landlord has no such obligation and may raise your rent to the point where you are paying more than you would with almost any mortgage rate.
If you are looking at your budget and feel the time is right to consider buying, it is important to first speak to a qualified lender who has your best interests at heart. Galaxy Lending Group values integrity in providing our customers with financial security through financing or refinancing. Call our office at (855) 595-1233 or fill out our online form to discuss your budget and take the first steps towards breaking free from renting. We look forward to helping you invest in a home you can call your own.