Discover the latest findings from Bank of America’s Homebuyer Insights Report, which reveals that despite uncertainty, renters are eager to become homeowners and take advantage of long-term financial benefits and control of their living space.
Personal Banking, image by Jonathan Cooper
New data from Bank of America’s Homebuyer Insights Report found that many renters feel they’re losing out on substantial benefits of homeownership – from long-term financial health to control of their own living space – but are uncertain whether now is a good time to buy. The report reveals that 81% of renters said renting is temporary and 76% are planning to buy within the next five years.
St. Louis has seen one of the largest rent increases across the nation, with median rent increasing 9.5% month-over-month according to Rent.com. Accordingly, the fear of buying when home prices are at all-time high, combined with inflated interest rates is not attractive and hardly affordable, but the lack of control and stability of renting has led many to desire purchasing a house.
This increase has led to 62% of renters feeling unsure of their next step, even though 70% know that renting is detrimental to their future finances – a key factor in the 2024 Homebuyer Insights Report.
With prospective buyers in St. Louis wondering how best to prepare for buying a home—now or in the future – below are some practical tips that can help with the process.
Tips to make homebuying easy:
- Prioritize your credit score: A higher credit score can make it easier for you to get a loan or borrow at more favorable rates. To build your credit, you should work to pay bills on time, keep credit balances low, avoid closing old credit accounts, and avoid taking on new credit unless absolutely necessary.
- Save, save, save: Having cash at the ready to buy a home can help you tackle down payments, maintenance costs, and any unexpected expenses that may come when buying a home. You can build your savings by creating a spending plan, sticking to it, and being kind to yourself. Only spend what you can afford, and save the rest.
- Minimize debt: Generally, the lower your debt-to-income ratio is, the more likely you are to qualify for a mortgage. Target one debt at a time (highest interest debt first), always make at least the minimum payment on your credit cards and loans and consolidate debts when you can.
- Prepare your finances: Before you begin your search for a home, figure out what you can realistically afford. Take stock of your income, debt, savings and other financial obligations. Then use a home affordability calculator to get an idea of the home price and monthly mortgage payments that would work for your budget.
- Get preapproved: Once you’re ready to buy, the next move is to meet with a lender to discuss loan options and current interest rates. A lender can provide you with a prequalification letter, which is an estimate of how much your borrowing amount might be based on income and other information. Taking it a step further, you may also want to consider getting preapproved for a mortgage, which is an offer to lend you a specific amount – typically good for 90 days. Neither of these are a commitment to lend, but preapproval can help show sellers you’re serious when you’re ready to make an offer.
- Use the Bank of America Down Payment Grant: Both new and first-time homebuyers could be eligible to receive up to $17,500 in grants to put towards down payment and closing costs, which do not need to be repaid.
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