Many people daydream about their perfect home from the time they’re young. Perhaps you have found yourself envisioning what colour scheme you’d pick and already have an idea of the type of lush furniture that would go in each room. You may also be thinking about the lifetime of memories you’ll be able to create in the different spaces of the home you can finally call your own.
However, your dreams may be short lived when you think about the cost of buying your dream home. You should know this doesn’t have to be the case, as buying a home isn’t as impossible as it sometimes seems. Although people are often under the impression that a mortgage loan or cash upfront are the only ways to go about acquiring their first property, there are others.
If you think outside the box, you’ll discover there are innovative means of getting a home that could be even more accessible to you. By learning about the alternatives you have, you can start working towards acquiring your dream home and making all of your interior design dreams a reality. Find tips on a couple of innovative ways to pay for a house that you may be able to use when you’re ready to purchase a home.
Understand the Basics
Owning a home is a huge responsibility, so it isn’t a commitment you should rush into blindly. Before thinking about how you can pay for a house, be sure you learn the step by step process of acquiring a home from start to finish. The first step would be to explore different types of loans that are out there so you know how much you need to save for the down payment. With a Federal Housing Administration Loan (FHA Loan) in the United States or the First-Time Home Buyer Incentive in Canada (FTHBI), you may need as little as 3.5% down if you have at least a 580 credit score.
Beyond knowing which mortgage loan to get for a home, other information you should know is how much monthly maintenance is going to cost you. Some bills to consider include home insurance and property tax. The amount you pay depends on what state, province, or territory you’re in, so make sure you have an idea of what that’s going to cost you annually. For the most part, have a breakdown of how much you’ll be spending on house expenses or condo fees.
If you do eventually decide to take out a mortgage loan, be sure you’ve got your debt under control first. The reason is that even if you can secure a mortgage with mounting debt and a poor credit score, you’d be putting yourself at a disadvantage financially. Not having enough to begin with could mean you eventually begin falling behind on your mortgage payments. As a result, you may find yourself in a situation where you have to agree to refinancing your home or a forbearance, which is where your mortgage payments are temporarily suspended until you agree on a payment plan to bring your account back up to date.
However, if your debt is under control and you’re able to build a healthy emergency fund, you give yourself more security. Some steps to take to reduce your debt are paying more than the minimum monthly payment and getting a side gig to help you pay it off quicker.
These days, Bitcoin is becoming a prevalent payment method, and an increasing number of companies and individuals are accepting it as a form of payment. See if you can use Bitcoin to purchase your home, as many sellers seem to be opening up to the idea. A real-life example is the first single-family home sale involving Bitcoin that took place in Texas in 2017. It is, however, important to consider the volatility of Bitcoin and that this could result in sellers wanting you to pay for the home outright.
If you’re thinking about using Bitcoin to purchase a home but have never purchased the cryptocurrency before, start by finding the right Bitcoin exchange. Popular ones presently include Bitstamp Kraken and Coinbase. You’ll also need to pick a secure Bitcoin wallet to move your cryptocurrency into.
To help you save time, look for sellers that have made it known that they accept Bitcoin if possible. Websites such as Open Listings can help you do this as it features a search tool that allows you to search for the word “Bitcoin”. Despite the fact that people are still skeptical about the cryptocurrency, the good news is it’s possible to use it to buy your home.
Negotiate a Lower Mortgage
Instead of taking the first interest rate that a bank or lender presents you, why not see if you can negotiate something lower? There is no guarantee you’ll be successful, but it’s certainly worth a try. It is important to note that if you’re a well-qualified buyer, you’re likely to have more bargaining power. You should also see if you can use Registered Retirement Savings Plan (RRSP) money to increase your down payment on your first home.
If you don’t have much luck when attempting to negotiate a lower mortgage, try bargaining when it comes to the closing costs. You, as the buyer, would ideally shoulder the majority of these costs but you may be able to get the seller to cover more of the expenses than they typically would. So that you’re aware, the seller tends to cover the real estate agent commissions and sometimes, they’ll contribute to the cost of closing too.
If you happen to already be a homeowner and want to buy a new place, one of your best bets would be to maximize the value of your present property. By doing this, you put yourself in a good position to trade your home or remortgage as a way of getting a new one. To improve your current home and add value, check structural and cosmetic features like your roof for loose tiles or shingles.
Another way to add value to your home would be updating your flooring, especially if it’s wooden. You can replace it or refinish it, depending on its condition. Additionally, simple things like updating the fixtures, repainting and replacing cabinet doors should go a long way. These are also projects you can DIY to cut costs.
Before doing any home remodeling projects, be sure they will give you good returns on your investments. Be careful with kitchen and bathroom upgrades as they don’t always give the best return on investments. A final alternative would be to sell your home and use the equity to buy a new one. The more valuable your home is, the better the deal you’re likely to get.
There is more than one way to pay for a house, so never feel limited or like you have to follow a conventional route to homeownership. As demonstrated above, using cryptocurrency and being open to negotiating can get you much closer to your dream of owning a home you can call your own.