Break the Rental Trap and Apply for a Home Loan
Rent isn't getting any cheaper, with rental prices continuing to rise every year across the country. Yet, some people never look into the possibility of getting a mortgage.
Homeownership is one of the best ways to enjoy stability and predictable monthly payments. But if you get caught in a rental trap, moving into homeownership is easier said than done. As a result, you end up spending thousands of dollars on rent—money that could go towards a mortgage payment and building equity.
Homeownership remains cheaper than renting in 100 of the largest metro areas in the United States. So if you're ready to lock in a home price and start building a higher net worth, here are three ways to get out of the rental trap and apply for a home loan.
1. Research Your Mortgage Options
If you don't research home buying or mortgages, both processes can seem intimidating and beyond your reach.
Buying a home takes careful planning, and you need to educate yourself so you know what to expect. Luckily, plenty of resources are available to help. You can take a homebuyer education course. In addition, Cherry Creek Mortgage’s website provides an abundance of mortgage resources to help first-time buyers understand their options.
We offer blog articles on different aspects of getting a mortgage, designed to assist with understanding loan programs available. You can also take advantage of mortgage calculators, plus you’ll find answers to common mortgage questions, such as those related to interest rates, qualifying for a loan, down payments, etc. The more you understand about the process, the more confident you'll be. Only then can you come up with a game plan to improve your credit and save enough money for a purchase.
2. You're Probably More Qualified for a Mortgage Than You Think
Your own negative thoughts can also keep you stuck in a rental trap. Even if you have a strong desire to purchase, you might tell yourself it's not possible. The truth is, you might be more qualified for a mortgage than you think.
According to a HousingWire report, “It’s not that Millennials and other potential homebuyers aren’t qualified in terms of their credit scores or in how much they have saved for their down payment. It’s that they think they’re not qualified or they think that they don’t have a big enough down payment.”
We are available to answer your questions and jumpstart your home buying experience. Give us a call and one of our loan officers will sit down and discuss your options. Your credit score might not be perfect, and you might not have a large savings. Even so, you’ll be surprised to know that there are plenty of home loan programs that don't require superb credit or a lot of out-of-pocket cash.
3. Don’t Listen to the Naysayers
Some people have had horrible home buying experiences, and these individuals might fill your head with negativity. This could frighten you and make you question the decision to purchase a home. Just know that for every bad experience there are hundreds of positive experiences.
Yes, homeowners are responsible for maintenance and repairs. At the same time, the financial rewards of homeownership can exceed those of renting. As a homeowner, you'll build equity and increase your net worth. You can then put this equity toward buying your dream home later on, or use it to fund your retirement. Plus, mortgage payments eventually cease, whereas rent payments continue for life.
You’ll also enjoy predictable payments as a homeowner, which makes it easier to budget your finances. And mortgage holders can write off the mortgage interest they pay every month. This can lower your taxable income, resulting in a smaller tax bill or a bigger refund.
Getting stuck in a rental trap can be discouraging, especially if you have a strong desire to own. The key is believing in yourself and knowing it is possible. If you're ready to move forward, give us a call. We can determine whether now’s the right time for you to purchase. And if it isn't, we’ll provide guidance to help improve your situation so you can purchase in the near future.