Young people are idealistic; their vision reaches beyond their wildest imagination regardless of the expenses and the journey they will have to take. But in reality, their dreams and vision can be summarized into three parts: career, family, and homeownership. If you ask those who have this same perspective, the third one can be the most demanding goal to achieve.
If you are a young professional, even fresh out of college, being a homeowner sounds daunting. It is a huge decision with an even bigger responsibility. What makes it more challenging is the financial commitment that comes with it. You can assume that a young professional doesn’t have enough savings yet. Their credit scores might still be too low, making it challenging for them to qualify for a loan.
In 2021, the government and several banks will offer a program for new homebuyers. However, they will still undergo the usual process, including credit and income checks. On top of that, you may still need to meet the standard requirements.
The good news is that there are other ways to build your dream home. Here’s how a young professional can own a home.
1. Look for a Reliable Mortgage Company
It is true that getting a home loan can sound overwhelming. You can hear many sad and horrifying stories about failed attempts. Some issues center on the complex process of lending. Nonetheless, there are reliable mortgage companies to ensure a smooth homebuying process. These companies are client-centered and offer different programs ideal to the client’s needs and financial capacity.
If you don’t have money to pay for a down payment, rent-to-own is a good option. This would also be good if, for some reason, you did not qualify for bank financing. This option is as good as paying monthly rent. What’s better is that you get to become the owner of that house after an agreed period. The agreed period is two to three years, and it should be outlined in a contract. A rent-to-own property sells easier in a slow market.
This option is perfect, especially if you begin to have an emotional attachment to the home during your rental period. After your rental period, no sudden change is required. The familiarity with the surroundings will remain, and you don’t have to change addresses in all your legal documents. It also gives you years to rebuild your credit score.
3. Pay in Full
This is the simplest, most practical way to go about purchasing your dream home. By doing this, you get to enjoy a monthly rent-free, debt-free, and mortgage payments-free home living. Although this may mean spending a big chunk of your savings or bank account, it is more cost-efficient in the long run.
This means you only spend money to buy your home one time. Then for the rest of your life, you only pay for the other expenses. Finally, you have your own home all for yourself. Some may worry about payments for monthly rent or paying a mortgage, while you can sit back and relax in the comfort of your own home. You can have that sense of security that whatever happens, you have your own home. In case of sickness, disability, or even death, your family has a place they can call home. And they don’t have to spend a cent to pay for that home.
But as earlier mentioned, this may take a considerable amount to make a one-time, upfront payment. This may take a sacrifice and some lifestyle adjustments. Still, the benefits far exceed the sacrifices you have to make. If you don’t have the cash to spend for a one-off payment, then you can try to make a private loan from someone you know.
That way, as far as you and the seller or the bank is concerned, the deal is closed. Now, all you have to do is make an agreement with your friend or family member about your payments. You can do it monthly or quarterly payments. For sure, there will be flexible payment terms, but make sure that you treat such an agreement like a formal business deal. You can even initiate a written contract to build trust with your lender.
Dreaming of living in your own home is far different from buying one. It is doing something about that dream that makes it come true. Remember that not all dreams can be easily fulfilled. But with adequate planning and financial literacy, you can build the home of your dreams.