Dream home on hold? Here’s how to save smarter and buy sooner

(InvestigateTV) — A recent Bankrate survey found that 80% of aspiring homeowners view down payments and closing costs as major barriers to buying a home. And one in five said they will never be able to save enough for a down payment.

Mark Hamrick, senior economic analyst at Bankrate, said it’s a high hurdle right now to try to buy a house, especially for first-time buyers. 

“What have we experienced with the housing market in recent times?” Hamrick asked. “Number one, a continued rise in home prices nationally at a new record high. Mortgage rates have eased somewhat, that is some recent good news. But the 30-year fixed rate mortgage is still about 6.75%, according to Bankrate’s survey of large lenders.”

Hamrick said he doesn’t see this situation resolving itself in the near future, so now is the time to try to save up as much as possible. He said there’s no shame in renting for as long as needed, but there are steps buyers can be taking to change their situation.

“Number one, continuing to fund our down payment fund,” he emphasized. “Number two, continuing to save for emergencies because the very minute you step over that threshold of homeownership the clock starts ticking, you’re going to have to pay for other things like repairs, maintenance, the roof’s got to go. You’re going to have to replace the refrigerator, you’ll have to call a plumber, and all those things can be very expensive. “

Hamrick stressed the importance of having a well-qualified realtor during the transaction.

He recommended getting pre-approved for a mortgage once buyers are confident their credit score is in good shape.

Also, don’t forget to shop around for the best rate. A lower rate can save thousands of dollars over the life of the mortgage.

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