Many want to own a home, but getting there can be a bit of a challenge. However, if it is your dream, you must prioritize it. This might mean cutting back, getting a second job, or finding other ways to overcome common barriers.

Inability to Pay Off Current Debts

Qualifying for a mortgage will often require your spending on debt to be less than a third of your income. If the ratio is extremely high, you could be a risk to the lender, and you may have a higher interest rate on any mortgage you qualify for. If your debt is extremely high, now is the time to stop using credit cards and start paying off the highest-interest loans first. 

Paying down debt can give you financial freedom and make you more desirable to a potential lender. Another thing that can impact your debt to income ratio is cosigning on another person’s debt, like a student loan. It can be hard to turn down a student asking you to cosign with them because it might feel like you are preventing them from getting an education. You can read a guide with more information on what to consider when it comes to being a cosigner.

Poor Credit History

There are so many benefits to homeownership but if your credit score is too low, a potential lender will not want to give you the funds for a mortgage. It’s a good idea to aim for a score of 740 or higher and avoid letting it drop below 600. If you do no know your score, this is an excellent time to get a free report from the bureaus each year. Each report will give information on credit history, including positive and negative aspects of it. If you find there aren’t any errors or negative marks, you are doing a great job. If there are errors, you can get in touch with the bureau to have it fixed.

Not Having Steady Employment

When you go to apply for a mortgage lenders often look at your previous employment history, especially the past couple of years. If you have strung together part-time jobs or been self-employed and without a full-time job, a lender may not be as willing to give you a mortgage. There is not much you can do about your previous employment history, but you can ensure other potential issues, including your credit score and savings, are taken care of. That way, even if your income fluctuates, you can show you are financially responsible. If you do not have steady employment, this is a great time to start looking for a full-time job. Lenders like to see history with the same company, which indicates stability to them, so it’s a good idea to find a company you can see yourself staying with for a few years.

Limited Home Inventory

Limited home inventory can lead to rising prices because there are not enough houses to meet the demand. While there is not a lot you can do about this, you can still work with the issues. Consider broadening your search instead of looking in one or two preferred neighborhoods. If you work remotely even some of the time, you may have more freedom since you don’t need to go to the office all the time. You may find you love the neighboring areas as much as your preferred areas. 

You could also purchase an older home that needs some work and do some of the work yourself. This is especially helpful if it just needs a few cosmetic features, such as new paint. You will also be able to do the work slowly, giving you enough time to save money to purchase supplies. Things might get harder if the entire structure needs to be redone, as larger projects can get expensive quickly and take up much more of your time than originally planned. You might consider looking into homes you had not previously considered. A single-family home might be the first type that comes to mind, but you could also look to town houses, duplexes, or condos. Depending on the rules in the neighborhood you are looking to buy, you could also rent out part of the house and use the rent to help pay down the mortgage.