How (and Why) To Buy a Home Despite an Uncertain Market

A guide to feeling comfortable buying a home and building equity in any economic market.
Sep 6, 2023 10:00 AM ET

Originally published in USA TODAY

Buying a home can be stressful, regardless of economic outlook or whether a homebuyer has gone through the process before. But homeownership is a major step toward establishing financial stability and building wealth for future generations. Even in an uncertain market, it helps enable upward financial mobility.

Whether a person is a first-time homebuyer or they're looking for a place that better meets their current needs, obtaining the right loans and navigating the process can be daunting. Working closely with a mortgage loan officer to evaluate all available options can help make the process as simple as possible — and get homebuyers into their dream home all the sooner.

Even amid financial uncertainty and the chance of an economic downtown, purchasing a home offers the potential to build equity over time. According to KeyBank’s latest Financial Mobility Survey, most consumers are still planning on making big-ticket purchases this year, with two-thirds (66%) intending to make at least one large purchase in the next year.

When considering purchasing a home, the following tips from KeyBank can help first timers and seasoned house hunters alike on the homebuying journey:

  1. Assess finances.
    Before setting out to buy a home, it’s important for homebuyers to understand their budget; namely, how much they are able and willing to spend. Don’t forget to factor in the down payment, monthly mortgage payment, interest, taxes, homeowners’ insurance, moving costs, renovation fees and other expenses. Online mortgage calculators, like KeyBank’s Mortgage Affordability Calculator, are excellent tools to help gain a quick understanding of the finances behind a home purchase.
  2. Save for a down payment and additional expenses. 
    A down payment is one of the most significant expenses when buying a home. While this is typically 5% to 20% of the loan amount, certain programs, such as FHA loans or Key Community Mortgage, are specifically designed for those who could benefit from a lower down payment. Following closing, there are additional costs that need to be accounted for, including moving or renovation costs, which often are overlooked when homebuyers, especially those buying a first home, solely focus on the down payment. A local bank can help identify applicable down payment programs, develop a purchase plan and set up an account dedicated to saving for a house.
  3. Find the right mortgage loan officer. 
    The decision to buy a house should be based on finding the right home that fits within the homebuyer’s financial situation, and then working with a loan officer to make that purchase a reality. A mortgage loan officer can provide a clearer picture of the buyer’s overall financial situation, offer additional insights and considerations during the planning process, and identify the best mortgages and lending programs. When choosing a loan officer, make sure to consider a lender’s ability to close on time and familiarity with the local real estate market.
  4. Learn more about affordable homeownership, mortgage or banking programs.
    Banks play an important role in helping provide access to education, advice and resources (such as Special Purpose Credit Programs[1]) that ease the homebuying process and help remove barriers on the path to homeownership. KeyBank, for example, offers three Special Purpose Credit Programs to help borrowers with qualifying properties in eligible low-to-moderate income communities — including the newly launched Neighbors First Credit, which provides up to $5,000 toward closing and other costs[2] that may come with a new home for qualifying properties in KeyBank’s footprint.
  5. Consider all financing options. 
    There are a variety of loan options, from fixed-rate and adjustable-rate mortgages, to FHA, VA and USDA loans, as well as the Special Purpose Credit Programs noted above. Each loan or program has its own requirements and benefits, so it’s important that homebuyers understand the differences and choose the best option for their unique situation and seek out advice from a mortgage loan officer. Mortgage rates are cyclical, so it’s not out of the ordinary to see mortgage rates rise or drop lower. It is especially important that the decision to buy a home is based on an affordable mortgage payment within the buyer’s budget, as opposed to trying to time the market for a particular interest rate. Waiting for rates to decrease could result in losing the chance to purchase the right house at the right time. If rates do go down in the future, refinancing is always an option.

While owning a home does come with certain costs and risks, the potential rewards make it a worthwhile investment for the long road and, potentially, for generations to come. Real estate is a long-term investment and homeownership can help provide a tangible asset in an uncertain market.

For additional insights and resources on homebuying and other financial topics, visit the KeyBank KeyBank Mortgage Center or find a Key Mortgage banker here to help you.

Story from KeyBank. KeyBank Member FDIC. Mortgages ARE NOT FDIC INSURED OR GUARANTEED. Equal Housing Lender. NMLS# 418927

About KeyCorp

KeyCorp's roots trace back nearly 200 years to Albany, New York. Headquartered in Cleveland, Ohio, KeyBank is one of the nation's largest bank-based financial services companies, with assets of approximately $195 billion at June 30, 2023. Key provides deposit, lending, cash management, and investment services to individuals and businesses in 15 states under the name KeyBank National Association through a network of approximately 1,000 branches and approximately 1,300 ATMs. Key also provides a broad range of sophisticated corporate and investment banking products, such as merger and acquisition advice, public and private debt and equity, syndications and derivatives to middle market companies in selected industries throughout the United States under the KeyBanc Capital Markets trade name. For more information, visit KeyBank is Member FDIC. Mortgage and Home Equity Lending products offered by KeyBank are not FDIC insured or guaranteed. For the KeyBank Home Buyer Credit and the Key Opportunities Home Equity Loan, geographic restrictions apply. Ask us for details. NMLS #399797 © 2023 KeyCorp®. All Rights Reserved. CFMA# 230614-2123982

NOTICE: This is not a commitment to lend of extend credit. Conditions and restrictions may apply. Information and offer are subject to change without notice. All lending products are subject to collateral and/ or credit approval. Not all loans or products are available in all states.

[1] Special Purpose Credit Programs are, generally, programs that are established to meet special social needs or the needs of economically disadvantaged persons by extending credit to persons who would probably be denied credit or would receive it on less favorable terms, under certain conditions. See 15 U.S.C. § 1691(c)(1)-(3); 12 C.F.R. § 1002.8(a).

[2 Available on primary residence purchases only. Limited to certain geographical areas. Ask us for details.