Insufficient Savings
Saving for a down payment is one of the biggest hurdles to buying a home. For many people, saving enough for a 20% down payment on an average-priced average-priced home takes years. Others might not be able to come up with even 10%. And in some markets, such as San Francisco or New York City, the median sales price is now above $1 million! That means it would take at least $200K saved just for the downpayment.But there are other barriers too. One of them is credit. It would help if you had good credit or excellent credit (credit score of 750 or higher) to get approved for a mortgage loan. Any derogatory marks on your credit report can disqualify you from getting a mortgage. If you've been late paying your bills or owe more than you can afford to pay back, this could adversely affect your ability to get a loan.
Poor Credit Score
This is one of the most common reasons first-time homebuyers can't buy a home. If you have poor credit, it's hard to get approved for a mortgage loan. You may be able to work with a lender, but it will probably cost you more in closing costs and interest rates. Even if you're already making your mortgage payments on time, late payments from when you were younger can hurt your chances of getting approved for an FHA loan. It's possible that you could pay off these debts or get them removed from your credit report so they don't affect your future applications before applying for a new mortgage loan.Student Loans
One of the most significant obstacles is student loan debt, which can burden any household budget. In fact, according to data from the Federal Reserve Bank of New York, it is estimated that more than 40 million Americans are currently repaying over $1 trillion in student loans. Because so many people need to use their income to pay off this debt, they cannot save for a down payment on a home. Another obstacle for first-time home buyers is credit history; borrowers with low credit scores or no credit history may be turned away by lenders. Additionally, some people want to purchase homes but do not have enough money saved up for the down payment and closing costs.Lack of Employment History
You can't get a mortgage without a job. This is the first obstacle that first-time home buyers face. Most lenders require at least two years of employment before approving your loan application. If you are starting your career or are unemployed and seeking work, this can be quite a challenge.Another critical requirement for mortgage approval is steady income. Lenders want to make sure that if you have to stop working for some reason, such as being fired or injured on the job, you'll still be able to cover your mortgage payments with money coming in from other sources like investments or rental properties.
Rising Home Prices
Home prices in the United States have been increasing steadily for many years, with a few bumps. This trend has been attributed to factors such as an increase in demand for housing, a limited supply of homes on the market, and low mortgage interest rates. As home prices continue to rise, more and more first-time home buyers are being priced out of the market.- Only 1 in 3 Americans can afford to buy a median-priced home.
- 1 in 4 Millennials cannot afford even a median-priced rental property.
- There are 44 million renters who make up 36% of homeownership prospects due to affordability issues. *Who will be left in this economy-- only those who already own their homes?
- The answer may be yes. If you haven't bought your house yet or plan to someday soon, know that there will likely be obstacles along the way-- and know that it's okay! After all, no one said owning your own home would be easy!