The prices of homes on Oahu continue to steadily rise. Every year a good amount of buyers sadly get squeezed out of the real estate market because their salaries don’t necessarily keep up with those increases. Others want to save up more for their down payment, or have convinced themselves that “it’s just too expensive to buy.” Does any of this sound familiar? If so, read on…
Are You a Serial Renter?
If the answer is yes, it may be time to ask yourself why? Is it because…
- you’re still in college?
- your credit is not great?
- you’re not earning much money per month?
- you don’t have enough savings for your down payment and closing costs?
- what you can afford to buy is not enough for your family size?
- you’re not sure that you’re going to stay in Hawaii for too much longer?
Those are all legitimate, good reasons where buying a home right now may not make financial sense or even be a possibility. However, until you set your goal for home ownership, here’s what will continue to happen:
- You’ll continue to pay off your landlord’s mortgage
- Your rent will keep increasing, sometimes yearly
- Your lease may not be renewed because your landlord decided to sell or possibly rent to someone else
- You can’t or may not want to improve the home because it’s not yours
- You have no asset at the end of your lease to justify your rents paid
Tips For Preparing to Become a Homeowner
You probably know all this in theory and have heard it or read it many times before, but if you sincerely want to become a homeowner one day, here’s what you should do to prepare:
- Pay your bills on time…always!
- If you don’t have any credit, start establishing it today. Open a Macy’s card or something similar. Charge one item, pay it off before the due date, then a few months later repeat the process.
- Talk to a family member about being a co-signer for you. Usually it’s your parents who may have better credit, more income, and possibly some savings to help you with your down payment.
- Get a better paying job or one with more hours or stability.
- Make compromises with your housing needs vs wants. You will likely need to make sacrifices, either with your lifestyle in terms of the way you spend your money or with the kind of property you want/the area you wish to buy in.
- Get smart on the USDA loan and the areas on Oahu where you don’t need a down payment.
- Learn about strategies to help get your closing costs paid.
How to Get Assistance
- Talk with a lender or a loan officer who can either guide you on how to increase your credit score or help you to pre-qualify for a loan at no cost or obligation.
- Go to a home buying seminar or first-time homebuyer class.
- Consult a Realtor about the home buying process.
- Make it your goal to buy a home instead of renewing your lease when it expires.
You can get off the renter cycle; trust me, I know from experience. I bought my first 400 square foot studio apartment (with no parking) when I was 22 with the help of my parents who co-signed for me. It was the best investment I could have made for my future once I graduated from college. I had 3 jobs at one point to support myself, but I did, and so can you! With the equity that built up over time, I bought a home. Less than ten years later, the value of my home has more than doubled in value. There is nowhere else I could have invested my money (and leveraged my money) to gain that kind of wealth.