The American Dream: 10 Ways To Make It A Reality

The American dream can encompass many things. It is an idea, fostered by our forefathers, that people will be rewarded for their hard work, and advancement and recognition will be based on merit. It is not an expectation of free handouts or streets made of gold, but rather an ideal that anyone can progress in life by the sweat of their brow and the courage of their convictions. What it amounts to is the ability to live a good life and provide a stable home for one’s family. And while attaining the dream of home-ownership has become a bit more difficult in recent years due to the downturn of the real-estate market, it is not beyond your reach if you follow a few simple steps.

1. Set a budget. Probably the hardest part of buying a home is determining what you can realistically afford. Of course you would like to buy the million-dollar home in Malibu, but not many people can actually pull it off. So make an appointment to meet with a mortgage lender to determine how much money you can reasonable secure for a loan.
2. Save for a down payment. The requirement for a down payment can be anywhere from 4% to 20%, depending on a number of factors. Just remember that the more you put down, the less you will have to have to pay on your monthly mortgage.
3. Polish your credit score. Any outstanding debt, pending collections, and so on will drag down your credit score and possibly affect your ability to secure a loan, so pay off everything you can before you apply for a loan and make an effort to pay all of your bills on time. You may also want to contact credit institutions in an attempt to expunge and remove any black marks that are affecting your credit score. You will need at least a 660 to qualify for most loans, but shooting for over 700 is even better.
4. Keep your job. Most lenders require that potential homebuyers have had steady employment (with the same company) for at least a year, although two or more is preferred. So if you’re thinking about purchasing a house, now is not the best time to make a career change.
5. Qualify for a loan. If you have met the above criteria, there is a good chance you will qualify for a loan. However, the amount of the loan depends almost entirely on your income (and your down payment). Generally speaking, the amount of your monthly payments (including mortgage, property tax, and insurance), cannot exceed 25-30% of your income or you will not qualify for the loan. Don’t forget that there are many types of loans, so do some research to find out which one will work best for you.
6. Find a house! Now that you have a target number in mind, you can begin searching for a home. Prices will vary greatly, so you need to determine what you want (number of rooms, square footage, lot size, location, etc.) and temper that with the budget you have set. Keep in mind that you may not get everything you want, so prioritize your list of requirements to help you manage your expectations and keep the process fun.
7. Consider the extras. Don’t forget that along with your monthly mortgage payment you will also have yearly expenses in the form of property tax and various insurance (homeowners, for one, but possibly with the addition of earthquake, fire, and so on). You should be aware that the cost of these additional expenses will fluctuate by county of residence, so buying property in another county could save you a lot.
8. Consider repairs. Older homes, while sometimes less expensive, may require any number of repairs (depending on age, usage, damage, etc.). If you don’t think you can afford the extra expense, you may want to opt for a newer development, ask for a reduction in the sticker price, or take out a bigger loan to make repairs.
9. Buy down the interest rate. Rather than putting all of your savings into the down payment, consider spending some of it to buy down the points on your interest rate. In the long run, it can save you a lot on your monthly payments and your overall loan.
10. Sign on the dotted line. Now that all of your ducks are in a row, there’s nothing left to do but sign all the paperwork, get the keys, and move into your new home.

Kathleen Macky is a writer for Tampa Homes 24-7, which specializes in Riverview Real Estate.