How To Actually Afford To Buy A Home In America

Dated: May 18 2022

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Owning a home is the quintessential marker of success and stability. A home is a place for you to build your future, raise a family, and retire. Unfortunately, it’s increasingly out of reach for many Americans. The cost of renting exceeds the typical monthly salary in almost every city. Even buying a home isn’t cheap — the median home price hovers around $200,000 for the majority of cities. However, that doesn’t mean you can’t save up enough money to buy your own place. Owning a home is still an attainable goal if you know how to make it happen. Here are some tips on how to actually afford a home in America.

Consolidate your debt

If you have a lot of high-interest credit card debt, the best thing you can do is to consolidate it into a low-interest personal loan. You may be in an interest rate range like 6% and paying 15% on your credit card. If you consolidate that debt at 6%, your monthly payments will go down and you’ll pay less over time. This is a great way to make real progress towards home ownership.

Boost your income

If you’re not making enough money to afford a home, then your first step should be to boost your income. That can be as simple as asking for a raise, taking on an extra shift at work, or starting your own business. If you don't have the means to pay for a home now, there's no reason why you couldn't in the future with some hard work and dedication. Start saving early Another way to afford a house is to start saving as early as possible. It’s always better to build up your savings earlier rather than later since that will give you more time for interest to compound. You should also try budgeting so that you know how much of your paycheck is going towards essential expenses like rent and food versus things like clothes or entertainment. Look into easy-to-get loans One other option is to explore loans that are easier to obtain such as a 401k loan or an FHA loan. One of these loans could help supplement the down payment necessary for a traditional mortgage loan without impacting your retirement account or credit score. These are both good options if you're having trouble getting approved for a conventional mortgage loan because they offer less competitive rates and lower minimum requirements. Make sure that whatever loan you choose has manageable monthly payments which can fit into your budget and make it less complicated for you when it comes time to pay them off over the next few years.

Put in the work-time and save up

You’re probably thinking, “I’m already working and I can barely afford rent!” You might feel as if you don’t have the time to work any harder. But, the truth is, your time is what will get you a home. Saving money is about more than just cutting back on expenses, it’s about making sacrifices and putting in the extra work to make sure you have enough for that down payment. If you want to own a home, then you need to put in the hard-work and save up.

Don’t forget to factor in taxes and fees

The cost of buying a home doesn’t stop with the down payment and mortgage. There are also some other fees to consider when you buy a home. Real estate taxes: Everyone has to pay real estate taxes on their home, which typically come in at about 1 percent of the purchase price each year. Mortgage insurance: If you don’t have 20 percent for your down-payment, there is usually an additional fee to cover the risk that you won’t be able to pay your mortgage. Title insurance: The title company will want to make sure they are protected against any challenges with ownership. This typically equals 2-3 percent of the value of the property. HOA dues: You can expect anywhere between $200 and $600 a year in HOA dues, depending on where you live and what’s included in your association agreement. Surveillance costs: If your city or neighborhood requires surveillance cameras, this will be an additional expense every month. Fire insurance: In some areas, fire insurance is required by law and has to be paid yearly in order for homeowners to get coverage for certain events like fires or floods. Mortgage points: Mortgage points are one-time fees you have to spend if you want a lower interest rate on your loan for the life of your mortgage contract. The more points you pay up front, the lower your monthly payments will be — but it will cost more upfront

Commit to lifelong learning

One of the best ways to make sure you have the knowledge and skills needed for your career is to commit to lifelong learning. Keep your skills fresh, and update your resume. You never know when a new opportunity will come up that requires a fresh perspective or new skillset. Plus, this allows you to stay on top of any changes in the industry.

Use the equity from your current home

You may be able to afford a home sooner than you think. One way to save up for a down payment on your next home is to use the equity in your current home’s value. If you’ve already been living in your house for a few years, you’ll know what it’s worth and how much equity you have in it. You can use this equity to put down as your down payment on the next home.


Buying a home is one of the biggest financial decisions many of us will make. But it need not be a dream deferred. If you're willing to make some lifestyle adjustments, work hard, and be patient, you'll be able to afford your own place. But before you start viewing homes, take some time to make a plan. Here are some steps to take. 1. Get debt under control 2. Make more money 3. Save for the down payment 4. Consider the hidden costs 5. Be willing to invest in yourself 6. Find other sources of capital 7. Remember that home ownership is a lifetime commitment 8. Go slowly and be patient Conclusion: With a solid plan and determination you can afford to buy a home!

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Nick Hailey

Nick is the Founder and CEO of Black Castle Properties. He is also a Licensed Real Estate Broker with over 9 years of experience and an extensive background in sales. He understands the complexities o....

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