Can You Afford a New Home? The Answer May Surprise You!
According to Bank Rate, the median price of a new home in the United States is $80,000 less than an existing home. While constructing a new home is relatively cheaper than buying an existing one, the real question is: can you afford a new home? Read on to find out.
1. Adequate Personal Savings
You can afford a new home if you have enough personal savings to fund the construction. Having your own money allows you to invest in the home of your dreams. It also enables you to adequately prepare yourself and determine the kind of home you can build and what to put inside it. The new home should be within your budget and shouldn't be too expensive or cheap.
2. Credit History
Even if you don't have enough personal savings, having a good credit history puts you in an excellent position to afford a new home. It makes you legible for and increases your chances of getting home loans. The most preferred loan types for building a new home are mortgages because they are secured loans with low interest. Getting a new home with a mortgage loan is advantageous because you can purchase a more expensive house that you would not be able to afford with cash. You can hire home builders to design you a new home using the acquired loans.
3. Family and Friends
Family and friends can be handy when you want a new home. Some family members and friends could be willing to fund your construction by lending you money or acting as guarantors for your loans. Also, if you have family members or friends who are home builders, they can construct your home at discounted prices, allowing you to use the money on other things. Help from your loved ones can make affording a new home easier than you think.
4. Co-buying
Besides asking for help from family and friends, you can afford a home by co-buying it with your partner, friends, or family members. Co-buying is economical as it allows you to split the cost. It would be best to set up rules before co-buying a house to eliminate confusion and help solve disagreements in the future.
You can afford a new home if you have adequate savings, your credit record is good, or family and friends are willing to help. Contact our local team today if you want to c onstruct a new home or have any questions.
