The average home price in the US is currently $269,000. That’s a lot of money to spend on something that will only be your shelter and not much more. And if you’re like most Americans, it seems impossible to make enough money with a full-time job to afford such an expensive purchase on your own. But there are still ways for people who don’t have six figures at their disposal to find affordable homes—and here are 15 tips.
1. Decide what you can afford.
Before looking at houses, you need to figure out how much money you have to spend each month on a mortgage and other associated costs, like insurance and property taxes. Compute this by dividing the total of your monthly debt payments by your gross monthly income. This number should be no more than 36%, or you may have a hard time getting a home loan.
2. Get creative with financing.
There are many creative ways to finance a home purchase, so don’t be afraid to ask your bank or mortgage broker about them. You may be able to get a loan that doesn’t require a down payment, or you could use a home equity line of credit to cover some costs.
3. Get a government subsidy.
If you’re having difficulty affording a traditional home, you may want to look into government subsidies that can help. There are programs available for people of all incomes, so there’s sure to be one that fits your needs.
4. Get pre-approved for a mortgage.
Once you know how much money you can borrow each month, get pre-approved for a mortgage so that when you do find a house you like, you can make an offer quickly.
5. Search in affordable areas.
You don’t have to live in a tiny studio apartment in the middle of the city to find an affordable home. There are plenty of neighborhoods and towns where living costs are much lower than in more expensive areas.
6. Live in a rural area.
Rural areas typically have lower housing costs than more populated areas, so this could be an excellent option for you if you’re not too picky about where you live.
7. Think outside the traditional house.
If you’re looking for an affordable home, you may want to think outside the traditional house. Consider buying a condo or townhouse or even renting an apartment while saving up to buy a single-family home.
8. Look for fixer-uppers.
Homes that need some repairs or renovation can often be purchased at a discount, so if you don’t mind doing some work yourself, this could be an excellent option.
9. Consider a manufactured home.
Manufactured homes, or mobile homes, can be an excellent option for people looking for an affordable place to live. They’re often cheaper than traditional homes, and they can be just as nice (or even nicer).
10. Rent out extra space.
If you have extra space in your house—a finished basement, for example—you could rent it out and make extra money each month. That could help you cover some of your housing costs.
11. Consider a roommate.
If you can’t afford to buy a place on your own, consider finding a roommate to split the costs with. Make sure you know and trust this person enough because co-owning a home is a major commitment.
12. Find a co-op.
A co-op is a group of people who buy a house together and share the costs and responsibilities of owning it. That can be a great way to get into homeownership without spending a ton of money.
13. Get help from your family.
If your parents or other family members are willing and able to help you out, they may be able to cosign on a mortgage or give you some money to put towards a down payment.
14. Use a home buying service.
If you don’t want to go through finding and buying a home on your own, you can hire a home buying service to do it for you. That can be a great option if you’re unsure where to start or don’t have the time to do it yourself.
15. Stay patient.
Finding an affordable home can take some time, so be patient and keep looking until you find something that fits your budget.
There are many ways to find an affordable home. You may want to consider looking in a rural area, living in a co-op, getting help from your family, or using a home buying service. No matter what route you choose, be patient and keep looking until you find the perfect home for you.
