5 Ways to Make Homebuying More Affordable

Getting on the property ladder is more difficult today than it has been in recent memory. Between high home values, stagnant wage growth, and higher interest rates than we’re used to, homeownership may be feeling out of reach.

But my goal as a real estate agent is to make homeownership a reality for as many people as possible! And, to that end, I have created a list of five ways to make homebuying more affordable.

1. Take Advantage of Low Down Payment Loans and First-Time Buyer Programs

First of all, if you were thinking that you need a 20% down payment to buy a home, I have good news. That old 20% rule no longer applies. If you have good credit, you might qualify for a conventional loan with a down payment of just 3%. With fair credit, you might qualify for an FHA loan with a 3.5% down payment. There are even 0% down options for special circumstances. If you’ve served in the military, for example, you have VA benefits that could get you a $0 down home loan. Or, if you’re looking for a home outside of town, you might be able to get a $0 down USDA loan.

8808727. are also first-time buyer programs that might be able to help you with closing costs. These programs are always changing, so it’s best to speak with a lender to find out what options are currently available. You can always contact me if you would like a referral to a reputable lender.

2. House Hacking

House hacking is when a homeowner finds a way to make money from the property to help offset the monthly mortgage payment. And there are lots of options for house hacking!

• Buy a multi-family property. You could purchase a duplex, live in one unit and rent out the other. In some cases, the rental income is enough to cover the entire mortgage payment! And, even if it only covers half of the mortgage payment initially, as rental rates increase, the rent will cover more and more of your monthly payments.
• Get a roommate. Renting out a room is another way to earn income from your home, helping you cover the cost of your monthly mortgage.
• Rent out storage space. If you’re not comfortable having renters share your space, you can still house hack by renting out storage space. Garages, attics, and even open parking spaces can all bring in extra income to put toward your mortgage.

3. Get the Lowest Possible Interest Rate

Your interest rate dramatically impacts your mortgage payment. The lower your rate, the lower your monthly payment. So it pays to seek out the lowest possible interest rate if you want to make homebuying more affordable.

Here are a few ways to get a lower interest rate:

• Babysit your credit. The better your credit score is, the lower your rate will be.
• Shop around. Different lenders offer different rates.
• Consider an ARM (adjustable-rate mortgage). Unlike fixed-rate mortgages, the interest rate on an ARM fluctuates with changing market conditions. And because the lender doesn’t have to guarantee the rate for the term of the loan, they will typically give you a lower rate on an ARM than on a fixed-rate mortgage.

4. Have a Real Estate Agent Represent You

Did you know that buyers typically don’t have to pay to hire a real estate agent? Real estate fees are generally paid by the seller and divided between the listing agent and the buyer’s agent. So you could hire a real estate professional to represent you for free!

And having a real estate agent in your corner can save you money in a few different ways. Your agent might find you an off-market listing, for example. This would mean you don’t have to compete against other buyers, so you might get the house for a lower purchase price. Or, your agent might determine that the home you want isn’t quite worth the asking price. In that case, your agent might advise you to offer less, saving you money on the purchase.

Your agent can also tell you how much negotiation the market can support. Depending on current market conditions (and the specific situation of the seller), it might make sense to ask for the seller to cover some of your closing costs. Or ask the seller to reduce the price based on the results of the home inspection.

When I represent buyers, my primary goal is to help them get into a home they love. But my secondary goal is to get them the best possible price and terms on that purchase!

5. Make Smart Concessions

I hate to say this, but you probably won’t find the “perfect” home. Especially for your first home. Especially if you’re on a budget.

So, to make homebuying more affordable, you need to clarify your priorities, focusing on your “needs” and letting go of some of the “wants”. Here are a few ways to get a home for a dramatically lower price:

• Opt for a smaller house than you originally intended to get.
• Consider a condo instead of a single-family property.
• Search in the neighborhood next to your ideal location if it’s more affordable.
• Be willing to tackle a home that needs a little TLC.
• Give up an expensive amenity (the pool, view, or patio, for example).

The important thing is to get on the property ladder so that you can start building equity as an owner instead of continuing to throw money away as a renter. In 5-10 years, you may be able to sell that starter home for an upgraded home that matches all your needs and wants!

Are You Ready to Buy?

I am passionate about helping local residents become homeowners. If you’re ready to buy, I would be thrilled to sit down with you, explain the process, and discuss your options. There is no charge for this friendly, zero-pressure consultation. Contact me today to schedule a time to talk!

But what if homebuying still feels out of reach? If you want to become a homeowner, but you don’t see a path there from where you are now, contact me. Real estate is a long game, and even if you aren’t in a position to buy today, I can help you make a plan to get there! Contact me to arrange a completely free planning session today!

Homebuying may be less affordable today than it was a few years ago, but it’s never a bad time to invest in a home. Let’s get you on the path to homeownership today!

MARIA HOFFMAN, Real Estate Broker