Numerous studies have found that home ownership is more cost-effective than renting – up to 23 percent cheaper, by some accounts. Even so, three-quarters of renters think they are making the more affordable choice by staying in a lease. Where is the disconnect between perception and reality, and what is preventing some renters from making the leap into home ownership? A look at a few common uncertainties about home buying might provide some answers:

1. I can’t afford the down payment. Most people think they need a 20 percent down payment to buy a home, but that is just not the case. The required down payment is subject to myriad factors and can be quite low, depending on the lender and other circumstances. Shop around for the mortgage that best fits your unique situation and don’t be afraid to ask for a lower down payment.
    
2. My credit history is not good enough for a loan. Even though a credit score of 660 is considered the lowest acceptable score to secure a prime rate loan, there are plenty of lenders that will offer loans to buyers with lower scores. Of course, the higher your credit score, the better your mortgage rate, and the lower your monthly payments. But, don’t assume you’re completely out of the running until you ask.
    
3. I have too much debt for my income level. It’s true that a high income-to-debt ratio can affect your viability for a loan; however, it is within your control to lower your debt by paying it down over time. Spend some time aggressively attacking the debt with larger monthly payments and avoid increasing your debt as much as possible.
    
4. Houses are becoming too expensive. Home builders in the Chattanooga area take great pride in keeping housing affordable while maintaining the highest quality in materials and craftsmanship. Such quality translates to less costly maintenance and higher resale values. Additionally, buyers are enjoying historically low mortgage rates, which often offsets the increase in home prices.

Buying a home doesn’t have to be a frightening undertaking, and you’ll never know if you’re ready until you begin exploring your options. Consult with a lending professional who can help you determine your readiness for home ownership.

For a listing of banks, lenders and brokers in the Chattanooga area, please visit the Home Builders Association of Greater Chattanooga website at HBAGC.net or call 423.624.9992.