Written by: Dan Kofke, Motivational Mentor
For many people, the dream of becoming a homeowner in 2022 feels complex, expensive, and stressful. While there are various hurdles to overcome when finding and purchasing a home, it is still a very achievable goal — if the buyer makes plans in advance. However, it’s not just individuals who can benefit from homeownership.
Companies who educate their workforce on the ins and outs of buying, maintaining, or selling a home can help increase their employees’ quality of life and reduce financial stress at the same time. So, in today’s guide, we are going to take a closer look at what companies can do to help employees on their journey to becoming a homeowner:
What Are the Steps to Purchasing a Home?
The biggest step a business can take to increase homeownership rates within its organization is offering the right educational resources. More specifically, companies need to provide employees with accurate and useful information related to the home-buying process. So, here are some of the most essential steps to becoming a homeowner:
- Decide if it’s the right time to buy a house – Timing is crucial when learning how to become a homeowner. You will need to consider your current salary and employment status, as well as any potential income changes in the future. You will also want to calculate how much you have in liquid assets. Finally, you need to know your current credit score to see if you will qualify for low-interest mortgages.
- Determine how much house you can afford – Far too many people attempt to buy houses that they cannot afford. So, evaluate your debt-to-income ratio (it should ideally be about 30%) and consider the additional costs associated with buying a home, including taxes, homeowner’s insurance, and even HOA fees. You also have to remember that buying is very different from renting insofar as you are responsible for all repairs and maintenance costs.
- Save for a down payment and closing costs – If you have determined that you are in a position to buy a home, we recommend saving enough so that you have at least 20% of the purchase price as a down payment. When creating your budget, remember to factor in the closing costs. These can range from 2% to 5% of the loan, but they can either be rolled into your monthly mortgage payments or paid upfront. Either way, closing costs will add to the total “price” of the home.
- Get pre-approved for a mortgage – If you have a good credit score and enough income to make your monthly payments, you will likely get pre-approved for a mortgage. However, it is important to understand the type of loan you’re getting before you sign on the dotted line. The most important terms to know are adjustable and fixed rates. A fixed-rate mortgage charges the same interest rate for the duration of the loan, while an adjustable-rate mortgage has an interest rate that fluctuates over time.
- Find the right real estate agent – While you could always buy a house on your own, it is a good idea to get the help of an expert real estate agent. Fortunately, you can shop around online or in your local area to find someone who understands your needs and can help you close on your ideal home.
- Begin house hunting – Finding the right house is not just about aesthetics; there are many, many other factors to consider. First and foremost, you will need to find a house that is within your price range. It is also important to consider the square footage that you and your family need. If and when you find a house that you like, examine the condition of the home to see if it needs repairs before or after the purchase. Finally, consider the quality of the location, including its proximity to public transportation, local entertainment, and high-quality school districts. A real estate agent will have a lot of this information ahead of time, as well as the property value trends in the area.
- Make an offer – Once you have found the right home for you, it is time to make an offer. Again, a real estate agent should work within your budget to get you the best deal possible.
- If the offer is accepted, get a home inspection and appraisal – Your realtor can usually organize a home appraisal to make sure that you are not overpaying for the home. Moreover, a home inspection can alert you to the need for any repairs, which you can ask the current owners to fix or use as leverage to lower the asking price.
- The final walkthrough – Do one last walkthrough of the home to ensure that you like what you see and are confident in your purchase.
- Close on the house – Now you can close on the house, get the keys, and become a homeowner!
Becoming a Homeowner: Work With Mentoro to Help Your Employees Achieve Domestic Bliss
While the steps above can help your employees learn how to buy a house, there are additional factors to help build wealth and become financially ready to purchase a home. For this reason, companies have an opportunity to offer financial education resources so that individuals can set and achieve their life goals. With Mentoro, your employees can get direct access to financial advisors who can walk them through some of the more complex aspects of becoming a homeowner and offer financial wellness programs to help improve their overall financial health.
If you want to learn more about becoming a homeowner or if you want to find out how to implement a financial wellness program at your business, be sure to contact the experts at Mentoro today!