Rent prices are rising sharply across the US, and housing shortages are compounding the crisis. On average, one-bedroom apartments saw an increase of more than 24% in the last year, according to Rent.com.  Some areas have reported increases even higher with only a few posting decreases.

According to the latest report from ATTOM Data, owning a home is more affordable than renting in the majority of the country. The 2022 Rental Affordability Report says:

“. . . Owning a median-priced home is more affordable than the average rent on a three-bedroom property in 666, or 58 percent, of the 1,154 U.S. counties analyzed for the report. That means major home ownership expenses consume a smaller portion of average local wages than renting.”

Mortgage rates are no longer at historic lows, but even with the recent jump for a 30-year fixed-rate mortgage, they’re still relatively low. So, now is the perfect time to start thinking about how to afford a house. Here are a few ideas.

Look for First-Time Home Buyer Mortgage Options

  • Federal Housing Administration (FHA) loan. FHA loans require 3.5 percent down with a minimum credit score of 580; those with credit scores between 500 and 579 can qualify with 10 percent down.
  • US Department of Veterans Affairs (VA) loan. Eligibility for a VA loan is based on military service, but it requires no money down. Note that the VA has no credit score requirement, but lenders who provide the loans may.
  • US Department of Agriculture (USDA) loan. USDA loans provide low interest, zero-down financing for home buyers in rural areas. The USDA asks for a 640 credit score, but that can vary by lenders.

These programs ease the requirements to qualify for a loan and help make getting a down payment more affordable to more people.

Lower Your Debt

High levels of debt can happen for a variety of reasons, from unexpected expenses to the loss of a job to overspending. But it’s possible to reduce and eventually eliminate it. Spend less and save more by taking a break from your credit cards or even freezing your credit. Here are some tips to help you get out of debt.

  • Live within your means so you do not have to use your credit card as often. Set a budget and stick to it monthly.
  • Start building an emergency fund with whatever you can afford to save each month.
  • Pay down debt using the debt snowball method. This allows you to make noticeable progress by paying as much as possible each month toward your smallest balance. In the meantime, make the minimum payment on all your other debts so your accounts remain in good standing.
  • Look for a credit counseling program that can help you manage your finances and debt.

Are you ready to tackle homeownership? Contact CosmoLends by calling 216.387.1003 or click here to sign up online. CosmoLends are experts in home loan products including FHA, VA, Conventional, USDA and OHFA, as well as purchase rehabilitation loans such as the FHA 203(k) and HomeStyle Renovation products. Call us and speak to one of our mortgage coaches to find out how we can help. You can also speak with a member of our loan team for a FREE consultation.