The thought of buying a home is a dream for many Americans. With this said, it can also prove to be quite a challenging endeavor with many potential pitfalls along the way. Below, we highlight some of the most common challenges seen when buying a home. For more information on common issues encountered once you are under contract on a home, check out our previous article titled “Common Issues When Buying A House”.
Obstacles with buying a home
- Saving for a down payment: Current inflationary pressures have provided significant headwinds for Americans trying to save money. When buying a home, it is critical to save as much money as possible. For example, a conventional loan requires a down payment of at least 5%, while a government-backed loan, such as a FHA loan, requires a down payment of as little as 3.5%.
- Qualifying for a mortgage: Unless you are a cash buyer, you will likely need to qualify for a mortgage. To do this, lenders will look at your credit score, debt-to-income ratio, and employment history. If you have a poor credit score or a lot of debt, you may have difficulty qualifying for a mortgage. Paying down your debt and remaining employed with a steady income will greatly improve your chances of qualifying for a mortgage.
- Low inventory of homes: The housing market has been dealing with a persistently low inventory of homes for sale for quite some time. This low supply of homes not only provides buyers with limited options, but also makes it more competitive.
- High buyer demand in South Florida: Although the rising mortgage interest rates have forced many would-be buyers out of the housing market, we continue to see a strong demand from home buyers moving to the South Florida market. This has led to increased competition for home buyers in our area.
- Additional and unexpected expenses: Buying a home can be expensive, and there are a number of unexpected expenses that can come up during the home buying process. These expenses can include things like home inspection fees, appraisal fees, closing costs, and moving costs. It’s important to factor in these expenses when you’re budgeting for your home purchase.
Although there are many potential challenges with buying a home, it is important not to become too frustrated. As always, it is critical to have a knowledgeable and dependable team of real estate professionals guiding you throughout the process. This team should include a local and knowledgeable real estate agent, a mortgage broker, and a real estate attorney. If you are unsure of who to work with, your first step should be obtaining a referral for a local real estate agent.
Are you in the South Florida area and looking for assistance with either buying or selling a home? We can help! Contact Natasha at Live South Florida Realty, Inc. today! Also, be sure to download the free Florida Home Search app for your smartphone or tablet.