Lately, there has been a growing sentiment that the American Dream of homeownership is no longer a reality. We are here to tell you that is simply not true! While the timeline may be longer than it was for previous generations, the dream is very much alive—provided you have a strategic plan in place.
The Modern Timeline
Many younger people feel discouraged by current market prices, but it is important to remember that being prepared matters more than your age. Currently, the typical first-time homebuyer is in their mid-thirties by the time they are financially ready to dive in. Whether you are 25 or 45, the steps to success remain the same.
Step 1: Know Your Score
Your credit score is the foundation of your mortgage. If you are buying with a partner, pull both of your scores (available for free online). Generally, a credit score of at least 640 is sufficient to meet the requirements for most standard loan programs.
Step 2: Automate Your Savings
To minimize temptation, set up an automatic transfer of at least 10% of your earnings each pay period into a dedicated "Home Fund." Treating your savings like a non-negotiable bill is the fastest way to build a down payment.
Step 3: Factor in Closing Costs
Many buyers save for a down payment but forget about closing costs. For an FHA loan, you typically need between 2% and 2.5% of the purchase price.
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Example: On a $500,000 purchase, you should budget between $10,000 and $11,250 for closing fees.
Step 4: Meet with a Lender Early
No matter your current financial situation, meeting with an experienced lender or mortgage broker is vital—even if you feel years away from being ready. They are professional "dream builders" who can help you design a customized financial plan and identify the exact steps needed to reach your goal.
Step 5: Choose Your Advocate
The American Dream is only out of reach if you stop believing it can happen. Another free resource at your disposal is our team of professional Realtors. We are ready to help you navigate the local inventory and advocate for your interests.
Explore our Meet the Realtors page to find an agent who is the perfect fit for your journey.
