3 Signs Homeownership Is in Reach for You, According to BoFa Exec

Our experts answer readers’ investing questions and write unbiased product reviews (here’s how we assess investing products). Paid non-client promotion: In some cases, we receive a commission from our partners. Our opinions are always our own.With mortgage rates still high and inventory low, buying a home has become more difficult. But despite the challenging housing market, homeownership is still within reach if you are prepared.Matthew Vernon, the head of consumer lending at Bank of America acknowledges that the market has changed, but says “potential homebuyers have to take steps to be ready to buy in a financially responsible way, ” Vernon told Business Insider.”It’s important to be an educated and prepared borrower and to take specific steps that will put you in the best shape to afford to buy a home successfully,” Vernon states.According to Vernon, there are 3 steps you can take to be prepared to buy a home. Having all of these checked off means you are probably in a good position to buy:”Lenders are going to be looking for you to have money set aside for a down payment, so start saving now. It shows that you have skin in the game and that you have money to invest in becoming a homeowner,” says Vernon.Coming up with a sizable down payment (20% is considered ideal) can be a barrier to buying a home for some, so make sure to ask about down payment assistance when you are shopping around with different mortgage lenders.”There are grants out there for down payment assistance, and Bank of America is committed to offering affordable homeownership solutions and has down payment and closing cost assistance, but it still makes sense to save some money toward your goal of buying a home,” Vernon says.With mortgage interest rates being higher, your credit score matters more than ever.”The better credit you have, the better interest rate you will get,” Vernon explains. and understand that buying a home is not a race, if you need to take time to improve your credit, do that. It’s better to do that than try to buy a home when you are not in the best shape financially to do so,” says Vernon.Vernon also recommends getting prequalified for a mortgage before you even begin looking for a home.”When you are prequalified, your income and credit have already been factored in so you know what you afford and there are no surprises,” Vernon says.”You should only be looking at homes that you can afford, maintain, and sustain. This is also why getting prequalified is important. Think about what your expenses will be, all of the ancillary costs that it will take to maintain that home,” Vernon states.Home affordability is more than the mortgage payment. Recently, a family friend of mine sold his home and moved his family into another property because their previous home had a pool. They had no idea that pool maintenance would be so expensive.It’s important to look into the true cost of homeownership for any home that you’re interested in buying. It is the only way to be sure that you can really afford it.

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