“Those who live the most fulfilling lives base their decisions on facts, not fears.”

– Gary Keller, founder of Keller Williams Realty

If you’re in the market to purchase your first home, making the transition from renter to homeowner can be overwhelming and scary. The four powerful facts below can help aspiring homeowners move toward fulfillment and abundance. Delivered with empathy and care, these facts can help quell your fears and move you closer to experiencing all the bounties homeownership brings.  

1. Fear: “I can’t afford to buy a home now.”

Fact: Until you do the math, you don’t know what you can or can’t afford.

If you are currently paying rent, generally you can afford to buy. From a financial point of view, in
the United States, the tax savings on mortgage interest alone usually makes up most of the difference
between your rent and mortgage payments – the tax write-offs you get at the end of year will generally
help you save a lot of money.

Additionally, depending on your credit score, you can end up affording more than you realize. Note: The credit scores used for mortgage lending tend to take on a much larger picture of your overall credit score.

Finally, although there may be a higher initial cost to buying a house, if you’re planning on staying in
one place for a few years, the equity you build can end up being a financial boon.

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2. Fear: “I should wait until the real estate market gets better.”

Fact: There is never a wrong time to buy the right home.

Whether “right” means the right price or the right property for you, waiting for the perfect market timing
seldom works to your advantage. If you don’t believe us, look back to the Great Recession when the bubble around the housing market burst, GDP declined 4.5% and unemployment rose to around 9.5%. Everyone still feels the impact of this incredible financial event. But, like those who endured the Great Depression, the people who lived through the Great Recession made it through, and benefited from an era of financial growth. In fact immediately following the Great Recession, the United States entered the longest period of rising prices and general prosperity since World War II. The fact of the matter is, even the biggest economic downturns are, well, normal. Even when there were some events that threatened to dampen the economy, like the COVID-19 pandemic, the housing market still continued to thrive.

In the end, there are two ways to make money in real estate: timing and time. That is you happen upon the right moment to purchase your home before the price appreciates, or you hold it for a long enough time so that appreciation makes your purchase investment right. If you miss the first, you can most certainly count on the second.

3. Fear: “I don’t have the money for a down payment.”

Fact: There are a variety of down-payment options available to you.

While many people believe that making a home purchase requires a substantial down payment, as much as 20%, this is seldom true. Options are always available to you that require much less than this number, as low as 5%; some even less. Moreover, most states have down-payment assistance programs that can help you afford to buy.

House-hacking can also be a great way to make homeownership a more affordable option. House-
hacking is when you purchase a piece of real estate and lease out one of the bedrooms or units. This rental income can then be applied toward your mortgage. Or, you can participate in home rental programs like Vrbo or Airbnb. While it may not be ideal all of the time, you could always make your month’s mortgage payment by renting your place while you’re on vacation.

4. Fear: “I can’t buy a home ­because my credit score isn’t good.”

Fact: A less-than-perfect credit score won’t necessarily prevent you from buying a home.

Although it’s valuable to have a good credit score, a poor one shouldn’t necessarily prevent you from talking to lenders to explore your options. You can expect that a good loan officer (or mortgage specialist) will be able
to help you resolve your credit challenges, often simply
by showing you how to move or consolidate your debts,
or by referring you to a credit counselor who will put
you on a plan.

If you’re facing the challenge of having no credit history because you are new to the workforce or have not made
regular purchases on credit, there are still possible
solutions that you may want to explore. One is to
secure financing with the help of a cosigner, such as a
parent or close relative, who is willing to stand by your
ability to make the payments. Another can be finding a
lender who is willing to use alternative forms of history
such as student loans, rent, and utilities.

*This article is adapted from Gary Keller and Jay Papasan’s
­upcoming book Your First Home

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