Do you dream of being a homebuyer, but don’t have enough money for sky-high home prices? Don’t despair! Here are a few homebuying ideas that could make it more affordable for you to purchase your dream property.
1. Take Out a Federally Secured Loan
A house is expensive, but so is a mortgage. Most mortgages require you to make a 20% down payment, which is a pretty significant amount of cash on its own. But then mortgages come with additional closing costs that make the transactions even more expensive. Here’s an alternative to the standard mortgage: getting a federally secured loan.
A federally secured loan is a loan in which liability is covered by the federal government. These loans typically only require a down payment of about 3%, and they usually come with better rates (although you might have higher mortgage payments, so it’s best to eliminate your debt before you seek one). The FHA loan is one of the most popular types of loans with first-time homebuyers.
Buying a home in a rural area? You might be eligible to get a USDA loan, which is a federally secured loan that finances buyers purchasing a home in a rural or semi-rural area. If you’re a military veteran, you should consider looking into how to apply for a VA loan. Any of these federally secured homes can make a house or condo much more affordable than if you were to buy with a standard mortgage.
2. Buy a Fix-Me-Up
Here’s another great way to buy a house for cheap: buy a cheap house. You can always fix up the home after you buy it, and the cost still might be lower than what you would pay for a brand-new home in great shape. If you’re ready to get your hands dirty, then a fix-me-up might be a great option for you. You might even be able to claim some tax deductions by making green improvements.
The toughest part about fixing up the home is that you may need to hire a contractor for more advanced repairs, like anything pertaining to plumbing, electricity, or roofing. Contracting work can be expensive. Do lots of online research and find the best value contractors that won’t run up your buy-and-repair costs.
Do you enjoy having roommates? Why not go in on an old property with friends? You’ll dilute the cost of the home even more, and you’ll also have more hands available to fix up the home. Then you’ll all be able to enjoy a group living space.
3. Buy a Moveable Home
Most of the time, what makes a home expensive is the property itself, and not the actual building. Buildings generally depreciate in value, but most properties grow significantly in value over time. If you want to buy a more affordable home, then you might consider buying one that doesn’t involve land.
There are plenty of great moveable homes you can buy. Why not live in an RV? You can adopt a nomadic lifestyle and travel ‘round the country, working a few jobs here and there to pay for gas money and food. Isn’t that perfect for the gig economy?
Okay, here’s one last idea for you: live on the water. A houseboat may be a lot less expensive than a regular house, and you could live your lifelong dream of sailing around the world.
4. Buy a Prefabricated Home
Let’s consider the reverse scenario: there’s a property that you’ve bought or inherited, but now you need to put a home on it for cheap. A prefabricated home may be just the building for you. Prefab homes are essentially manufactured in sections at a factory, and then they’re shipped to your property and assembled on site.
Prefabricated homes are much cheaper than traditionally constructed homes. They tend to be a little smaller, but who needs all that Boomers-era space, anyway?
There are quite a few companies that sell prefabricated homes, and you can even order a home on Amazon. Yes, you read that correctly.
5. Buy a Shipping Container Home
One of the coolest new types of prefabricated homes are shipping container homes. There are houses that are just built out of shipping containers. Like assembling a LEGO building, shipping containers can be arranged in different ways to create rooms and levels. They can also be equipped with everything that you’d expect in a modern smart home, from plumbing, to electricity, to internet.
See? Buying a home doesn’t have to be so expensive, so long as you’re willing to think outside of the box.