Can’t afford to buy a house? 3 options to consider

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There’s a reason so many buyers are scrambling to buy homes right now. With mortgage rates historically low, it is extremely tempting to get a mortgage before those rates start to rise.

The problem: Limited inventory in the housing market. Because there are few houses on the market these days, the houses are being sold for higher amounts. And a lot of buyers are overpriced. If you can’t afford to buy a home right now, whether it’s because the prices are too high or because you just haven’t saved enough, don’t give up buying a home. . Try one of these solutions to take advantage of today’s remarkable mortgage rates.

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1. Buy a condo instead of a single-family home

There is an advantage to buying a freestanding home with a yard and a driveway: you get more space and more privacy. But if you can’t sell a single-family home and can’t wait to stop wasting your money on rent, consider a condo.

The Ascent recently researched average home prices across the country. The study found many benefits for condominium ownership. In New Jersey, for example, the median value of a single-family home this year is $ 355,423. But for a condo, it’s $ 275,174. It is a significant saving.

Of course, there are downsides to buying a condo. You might find yourself stuck with limited space and it may not sell as easily as a freestanding home would. But if you can keep it running for a few years, it’s worth considering.

2. Buy together with a family member or friend

Maybe you can’t afford a house where you live. But if you join forces with a trusted partner, like a friend or family member, you may find that a new home is suddenly within reach.

The is a danger in taking this route. There are legal implications and complexities that you will need to deal with when buying property together with someone you are not married to.

You will need to sit down with this partner and make an agreement to resolve the key issues. The two of you will need to decide who is responsible for maintenance and repairs, as well as what will happen if either of you wants to sell.

You will also need to make sure that the person you are buying with is financially sound. If it causes you to fall behind on your mortgage payments, both of your credit scores will suffer, even if you always do your part.

But as long as you resolve these important questions, owning a home together with someone else could be to your advantage.

3. Buy yourself a house and rent part of it

Maybe you technically qualify for a mortgage. Maybe you can offer a down payment on a house in your area. But what if that leaves you with too high a monthly mortgage payment?

If this is the case, it is worth considering renting out part of your home. This way, you will have regular income that you can use to cover your monthly mortgage payments. Rental income can also help cover all of the other expenses that accrue as part of owning your home.

Of course, having a tenant means you’ll have to deal with someone – maybe a stranger – living under your roof. And if your home doesn’t have separate living space, like a finished basement, you’ll lose some privacy. But if you’re worried about paying your mortgage on your own, a tenant might be the right solution.

Let’s be clear: Just because mortgage rates are low doesn’t mean you must buy a house now. But if that’s your goal, there might be a way to make it work. You just need to be a little creative.

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