Homeownership is part of the American Dream and plays an important role in building connections within communities. But home ownership has often been inaccessible to many potential African American buyers. According to the US Census Bureau, the home ownership rate for African Americans only was just 42.2 percent, the lowest rate for any race or ethnicity in America between 2014 and 2018.
When buying a home, financial literacy is essential to ensure a positive buying experience. Knowing your options will prepare you to find a home on a budget that you can sustain to add value to your family in the years to come.
The following tips will show you how you can make your dream of owning a home come true:
Before looking for a home, plan ahead
Before even looking for property to call home, you need to know how much home you can afford. Getting prequalified from a banker or loan officer will help you understand your price range so you don’t fall for a home that is over your budget.
By using research tools like Zillow or Trulia, you can also get more information on demographics, schools and comparable home values in the neighborhoods you are considering. All of this research before you shop for a home will help you make decisions as you proceed with your home purchase.
Demystify loan types and options
If you are planning to buy a home, it is important to understand the different mortgage loan options that are available to you. There are several types with different runtime options, including those that are government supported such as B. Veterans Affairs Loans (VA) or Federal Housing Administration (FHA) loans. and conventional and adjustable rate mortgages (ARM) and traditional 30 year fixed rate mortgage loans.
While you can gain this knowledge by listening to finance podcasts, reading home finance blogs, or taking free online courses, you can also get direct help from a mortgage advisor near you at your local bank, including Wells Fargo.
Monitor interest rates
As you navigate through the buying process, it is important to monitor the current interest rates. The interest rate you pay at the time of your purchase is affected by a number of factors, including current economic conditions and your current creditworthiness. The total cost of owning your home over the life of your mortgage is significantly affected by the interest rate on your purchase. A higher credit score increases your chances of getting the best interest rates.
Research options for assistance with down payments
A deposit is essential for the purchase process. This can avoid additional costs, such as taking out private mortgage insurance. You may be able to get help with your down payment or even lower your mortgage costs by finding and applying for special home subsidies, loans and tax credits.
Wells Fargo is helping African American potential homebuyers get closer to home ownership with its Advancing Homeownership Effort. This initiative helps increase home ownership by expanding financing options for skilled African American homebuyers. The 10-year diversity initiative will not only provide $ 60 billion in home loans and support at least 250,000 African American homeowners by 2027. Part of the goal is also to improve the financial advice and education of potential African American homebuyers.
A successful buying experience starts with research before you even look for a property. Schedule an appointment with your local bank with a home purchase advisor, including Wells Fargo, to explore and better understand funding options. Buying a home is a dream that should be available to all Americans, and it is possible if you take the right steps.