More and more people are shying away from homeownership and not just young people. According to Forbes, renters account for 36.3% of households in 2015, which is up from 33%. Also, there has been a downward shift in homeownership, declining from 69% to 63% in the last decade.
The Major Decline
According to Forbes, the biggest decline is seen in the age group of 35 to 44 year olds. This group, which was the hardest hit due to slow wage growth and foreclosure, have declined from 67% to 58% in the last decade. Since many were in their 20s and early 30s when the recession hit, some have been forced to shift from homeowners to renters.
Explore homebuyer programs
There are many different programs that offer homebuyer assistance. One particular program is the Finance Authority of New Orleans. This program is available not only to first time homebuyers but also to those who have owned in the past. The program is designed to provide homebuyers with 4% of the loan amount for closing costs and downpayment assistance.
First time homebuyers must complete a twelve (12) hour course and must be approved by a participating lender. Keep in mind, the grant payment does not need to be paid back. Borrowers must have income up to $84K for FHA/VA loans ($99K for conventional loans). Participants must have a minimum credit score of 640 and the loan cannot exceed $271,050 for FHA and $417,000 for conventional loans. If you are not in the New Orleans area, please do check your area for similar programs.
Check your credit
Keep in mind, if you are in the market to purchase a home, take time to review your credit before applying for a loan. Review your report to ensure that the report does not have inaccuracies on it. If you find that the report contains negative information that you believe should not be on the report – dispute. Also, don’t forget you can obtain a free credit report at annualcreditreport.com, which allows you to receive one free copy per year from each of the three credit reporting agencies.
Do your homework
Do your homework before signing on the dotted line. Before committing to a home loan, ask questions about the loan’s closing costs and fees. There is a great source, Looking for the best mortgage, which provides a listing of fees normally associated with closing.
Also, before purchasing get an idea of the taxes, insurance and other costs that may be associated with the home. You may also want to know the prior owner’s utility bills to get a sense of the amount you may expect to pay.
Kemberley Washington is a certified public accountant and professor at Dillard University.