Breaking Barriers: Challenges on the path to homeownership and how to overcome them

• Buying a house in the US for the first time is difficult.
• People face numerous challenges when trying to buy a home.
• Prices increased again in the last quarter.

Perhaps you are one of the many who hope to purchase a new home in 2023. While buying a house is certainly not impossible, there are some challenges you may not have expected.

We all wish for the house of our dreams and a place we can pass on to future generations. Unfortunately, it can be challenging for some, and inflation and rising interest rates have made it even more difficult.

US residents face challenges when purchasing their first home

These days it’s even harder to buy a new home due to increasing prices, that are outpacing raises and what people can earn for a hard day’s work.

First-time buyers in the US are sometimes shocked by housing prices, which puts them in the difficult position of trying to find something they can afford or continuing to rent while they scrimp and save to be able to purchase their own property.

«There is no sign that rates are going to drop in the short term»

CNN reports that Lawrence Yun, National Association of Realtors’s chief economist, explained that he expects «a further pullback in housing demand as mortgage rates impact affordability more. There are no signs that rates are going to go down anytime soon.” But where have home prices increased the most?

According to CNN, Punta Gorda, Florida showed an increase of 34.4%, and other affected areas include: Ocala, FL; Ogden, UT; Lakeland and Winter Haven, FL; Decatur, AL; Tampa and St. Petersburg, FL; Fort Collins, CO; Bradenton and Sarasota, FL; Myrtle Beach, SC; and Salt Lake City, UT.

Tools to buy the house of your dreams

While the landscape looks challenging, Latinos have always shown they are made to overcome barriers. To help, RocketMortgage® offers a series of tips and tools at your disposal so you can become the owner of the house of your dreams.

First, you need to crunch the numbers. The starting point is income. You need to determine how much you can pay for the house you desire. In addition to this, consider some additional expenses such as: property taxes, home insurance, home maintenance and care, homeowners association fees (HOA), utilities (gas, electricity, water) and unexpected expenses (medical emergencies and unforeseen home repairs).

Now, it’s time to calculate the monthly mortgage payments. To make this simple, RocketMortgage® has a mortgage calculator that will guide you through a series of steps.

Prequalification Letter and Preapproval Letter

There’s a difference between the two. In the former, a lender says you are prequalified for a specific amount. This means they inform you of what you might afford based on a verbal confirmation of how much you earn and your credit score.

In the latter, a mortgage lender determines the loan amount you qualify for. This has more value because it’s not based solely on word but on official documents, such as bank statements, credit reports and W-2s.

RocketMortgage® assists you

To increase your chances for a great offer and assist you, RocketMortgage® suggests you obtain a Verified Approval Letter (VAL) from Rocket Mortgage®. A VAL is one of the most valuable tools, as it helps make your offer more considerable in the market.

This is because it helps sellers see your economic profile, for instance: assets, income, and credit score, which have been thoroughly analyzed by RocketMortgage®’s experts.

Consider the time of year

The time of year influences the decision to buy a house, affecting both inventory and prices. Each season has its peculiarities:

Winter: This is the cheapest time to buy due to motivated sellers. However, inventory is limited, and weather conditions can make searching and inspection harder. But the closing process tends to be faster.

Spring: An active season with high inventory, but also a lot of competition among buyers. Houses look their best, and there’s pent-up demand from winter. It’s essential to act quickly due to bidding wars.

Summer: A busy season, but waiting until late summer can offer better deals. Location plays a crucial role, and areas with extremely high temperatures may not be ideal for house hunting. It’s crucial to act fast and, if possible, wait until the end of summer to get better prices.

Autumn: An ideal time for those looking for good prices since sellers are often more motivated. However, there’s less inventory. Many buyers drop out after summer, leaving more room for negotiation.

Considerations for overcoming these obstacles

Consider that, from the moment you decide to buy a house, there are some points in your favor that will help you achieve this goal. Below, we present a few important ones that you may be overlooking.

Finding a good real estate agent

In the world of housing, a good real estate agent is essential. They have the skills to tell you which houses match your needs. It is important that you communicate what you want so they can find plenty of options that fit your specifications.

Once you find a real estate agent you trust, it is time to analyze what you need to do to acquire your dream home. 

Options for obtaining capital

Conventional Loan: This is one of the most common loans. A private lender makes the loan and then it is acquired by a government-sponsored enterprise (GSE). This is not backed by a government agency.

To qualify for this type of loan, it is necessary to have a minimum credit score of 62. Another interesting point is that first-time homebuyers can make a down payment of as little as 3% with this type of mortgage.

FHA Loan: These loans are backed and insured by the Federal Housing Administration (FHS). They have a minimum down payment requirement of 3.5 and less strict credit score requirements.

This is what makes them attractive to first-time home buyers. A downside is that you have to pay a mortgage insurance premium (MIP) for the duration of the loan. However, if you make a down payment of at least 10% this payment will expire after 11 years.

VA Loan: This is another government loan that is backed by the Department of Veterans Affairs (VA). This is primarily for veterans, current service members and eligible surviving spouses.

This type of loan does not require a down payment. However, there is a required funding fee. Likewise, this loan does not require a monthly mortgage insurance. It also has lower interest rates and does not require a minimum credit score, although the average minimum score requirement for a VA loan from Rocket Mortgage® is 580.

These are just a few points to help you acquire your first home. To learn more, we invite you to visit RocketMortgage.com so you have more tools to acquire your first home!

Rocket Mortgage, LLC; NMLS #3030; www.NMLSConsumerAccess.org. Equal Housing Lender. Licensed in 50 states. For additional information please visit RocketMortgage.com. 

Participation in the Verified Approval program is based on an underwriter’s comprehensive analysis of your credit, income, employment status, assets and debt. If new information materially changes the underwriting decision resulting in a denial of your credit request, if the loan fails to close for a reason outside of Rocket Mortgage’s control, including, but not limited to satisfactory insurance, appraisal and title report/search, or if you no longer want to proceed with the loan, your participation in the program will be discontinued. If your eligibility in the program does not change and your mortgage loan does not close due to a Rocket Mortgage error, you will receive the $1,000. This offer does not apply to new purchase loans submitted to Rocket Mortgage through a mortgage broker. Rocket Mortgage reserves the right to cancel this offer at any time. Acceptance of this offer constitutes the acceptance of these terms and conditions, which are subject to change at the sole discretion of Rocket Mortgage. Additional conditions or exclusions may apply.