For many home shoppers, buying a house right now can seem like a very pricey pipe dream. Mortgage interest rates still hover at an uncomfortably high mid-6% range for 30-year fixed-rate loans. And the Realtor.com® economists expect home prices will rise 5.4% year over year in 2023.
Those factors mean buying a home right now is an expensive endeavor. But this doesn’t mean your goal of homeownership is out of reach.
“The key to buying a house on the cheap is knowing how to balance achieving your dreams while staying within your budget,” says Casey Ames, owner and CEO of Taylor Jene Homes in Boise, ID.
If buying a home is on your horizon but affording things like a down payment feels like an uphill battle, take a look at these tactics for getting a house on the cheap. Relatively.
1. Get a low-down payment—or no-down payment—loan
Most homebuyers are nowhere near being able to make a 20% down payment. Good news, though: You may qualify for a loan that requires you to put very little money down at closing time.
A Federal Housing Administration loan allows you to put down as little as 3.5% of the purchase price as long as your credit score is above 580.
Anyone who qualifies for a Department of Veterans Affairs loan or a USDA loan can put as little as 0% down. Although the requirements vary by lender, borrowers typically need a minimum credit score of 620 for a VA loan and 640 for a USDA loan
Be aware, though, that the guidelines for a government-backed loan can be fairly strict, and you’ll be on the hook for things like mortgage insurance and an inspection conducted by the U.S. Department of Housing and Urban Development.
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