Realizing the American Dream of Homeownership

Homeownership has long been considered the American Dream, and it is something that every American should be proud of. However, having a home is a highly personal dream for many people. Our home offers us safety and security, as well as an environment in which we can grow and thrive.

Last January 17, we honor Dr. Martin Luther King, Jr.’s legacy. Many of us will remember his commitment to the issues he supported, notably his famous “I Have a Dream” speech in 1963. Today, as we consider his words, it may motivate you to pursue your own dream of homeownership. And if that’s the case, know that you’re not alone. You can start your journey toward homeownership by completing the questions below with our help!

What Should I Do First?

Purchasing a home is not a task to be taken lightly. You must decide on important factors such as how long you intend to live in a given place, how much space you require, what type of commute is best for you, and how much money you have available.

You’ll then need to apply for a mortgage once you’ve decided you’re ready to buy. To determine how much you may borrow, your lender will consider a number of criteria, including your credit history. Lenders want to know how successful you’ve paid off your previous bills, such as student loans, credit cards, vehicle loans, and other types of debt.

According to Freddie Mac:

“To get a rough estimate of what you can afford, most lenders suggest that you should spend no more than 28% of your monthly gross (pre-tax) income on your mortgage payment, including principal, interest, taxes, and insurance.”

What Should I Do If I Don’t Have Enough Money for a Down Payment?

When it comes to determining how much you can afford, you’ll need to know how much to set aside for a down payment. While saving for a down payment may seem intimidating, there are a variety of choices and resources available to assist.

According to Business Insider, automatic savings can bring you one step closer to achieving your target down payment:

“If you receive your paycheck as a direct deposit, you may want to arrange for your company to send a percentage of each check directly into a savings account for the down payment. . . . The automatic-savings strategy makes it so you don’t have to constantly remember to save money.”

How Can I Achieve My Financial Objectives?

Another strategy to boost your savings is to stick to a spending plan. There are tools accessible if you’ve never budgeted before. MoneyFit.org, for example, has a budgeting worksheet you may use to make your own plan as well as five rules to follow when saving. They advise you to:

• Determine your objectives.
• Keeping Track of Expenses
• Earnings of a Lifetime
• Calculate and compare
• Identify and Correct Weak Spots

If you’re currently budgeting, think about how you may cut your spending, even more, to speed up your path to homeownership. After all, even putting a small amount of money aside each month can add up over time.

Bottom Line

If you want to achieve your dream of homeownership this year, remember that it’s possible if you plan beforehand. And, most importantly, remember that you are not alone. Every step of the journey, we are always available to assist you.