Homebuyer’s Guide

Things to consider when buying a home.

A Deeper Look at Affordability

Rising prices and bidding wars are leading some buyers to question affordability. Here’s what the data says.

The 2021 U.S. Home Affordability Report from ATTOM Data explains that the major ownership costs (on the typical home) as a percent of the average national wage increased from 22.2% in the second quarter of 2020 to 25.2% in the second quarter of this year. That means homeowners today are contributing a slightly higher percentage of their total income to their monthly mortgage payments than they did last year, but this shouldn’t be a major cause for concern.

What does that mean for you?

While you may not get the home buying deal someone you know got last year, that doesn’t mean you shouldn’t still buy a home. Here are your alternatives to buying and the trade-offs you’ll have with each one.

Alternative 1: I’ll rent instead.

Some may consider renting as the better option. However, the monthly cost of renting a home is skyrocketing, according to National Rent Report from Apartment List. If you continue to rent, your monthly payments will keep increasing at a very rapid pace. That means you’ll end up spending significantly more of your income on your rental as time goes one, which can make it even harder to save for a home.

Alternative 2: I’ll wait it out.

Others may consider waiting for another year in hopes that purchasing a home will be less expensive by then. By waiting until next year, you’ll potentially pay more for the home, need a larger down payment, pay a higher mortgage rate, and pay additional over the life of the loan.

Bottom Line
While you may have missed the absolute best time to buy a home, waiting any longer may not make sense.

The Path to Home Ownership

  1. Save for Your Down Payment
    Create a budget and do your research. There are lots of low down payment options available.
  2. Know Your Credit Score
    Learn your score and clean up outstanding debts like student loans and credit cards.
  3. Find a Real Estate Agent
    Contact a local professional to guide you through the process.
  4. Get Pre-Approved
    Differentiate yourself as a serious buyer and have a better sense of what you can afford.
  5. Find a Home
    Work with your agent to find a home in your budget that meets your needs.
  6. Make an Offer
    Determine your price and negotiate the contract.
  7. Have a Home Inspection
    Address any hidden issues in the home with the seller.
  8. Get a Home Appraisal
    Ensure the property is worth the price you are prepared to pay.
  9. Close the Sale
    Schedule a closing date once the loan is approved so you can sign the final paperwork.
  10. Move in
    Congrats! You’re a homeowner.

Do I really need a 20% down payment?

There is still a common myth that you need to come up with 20% of the total sale price for your down payment. The reality is – whether it’s your first home or you’ve purchased one before – you most likely don’t need a 20% down payment.

Today’s median down payment is less than 20%.


First-time homebuyers


All homebuyers


Repeat homebuyers

It’s important to know you likely don’t need a 20% down payment, but you do need to do your homework to understand options available. Be sure to work with trusted professionals from the start to learn what you may qualify for in the home buying process.

Bottom Line
Don’t let down payment myths keep you from hitting your home ownership goals.

Things to Avoid After Applying for a Mortgage

Consistency is the name of the game after applying for a mortgage. Be sure to discuss any changes in income, assets, or credit with your lender, so you don’t jeopardize your application.

  • Don’t change bank accounts
  • Don’t apply for new credit or close any credit accounts
  • Don’t make any large purchases
  • Don’t deposit cash into your bank accounts before speaking with your bank or lender
  • Don’t co-sign other loans for anyone

The best plan is to fully disclose and discuss your intentions with your lender before you do anything financial in nature.

Contact Us

If you have questions or want to review our full homebuyer’s guide, contact us today!