For millennials and Generation Z, the dream of homeownership may look a little different than it did for our parents. With skyrocketing prices and student loan debt, buying a traditional home is becoming increasingly difficult. But that doesn’t mean that home buying is out of reach. There are many alternative options available to those who want to become homeowners. Read on for seven tips for mortgaging an alternative home or property:

1. Get pre-approved

Even before you start looking for potential properties and dreaming about your forever home in your budget, it’s vital to get pre-approved for a mortgage. This process involves submitting your financial information to a lender to determine how much they will lend you. This way, you know your budget starting out and don’t look and get your hopes up about homes outside of your budget.

2. Consider alternative real estate

There are a variety of alternative homes that you may not have considered, such as tiny homes, mobile homes, and off-the-grid homes. These types of homes can be a great option if you’re looking for something more affordable or unique. If you’re interested in exploring alternative real estate options, start by researching online. Several websites, such as Tiny House Listings and Mobile Home Living, can help you learn more about these types of homes. Once you’ve found a few options that you’re interested in, contact a real estate agent to help you find homes that fit your budget and needs.

3. Pay off debt

One of the most important things you can do when preparing to buy a home is to pay off your debt. This will not only improve your credit score but also free up more money for a down payment and closing costs. Paying off debt may seem daunting, but there are a few simple ways to do it. First, create a budget and stick to it. This will help you see where your money is going and where you can cut back. Second, consider consolidating your debt into one low-interest loan. This will save you money on interest payments and make it easier to pay off your debt quickly. Finally, make extra payments whenever possible. Even an additional $50 per month can make a big difference in the amount of time it takes to pay off your debt.

4. Build a down payment

The next step in preparing to buy an alternative home is to save for a down payment. Depending on the type of home you’re interested in, your down payment could be as low as three percent of the purchase price. However, it’s always a good idea to aim for 20 percent to avoid paying private mortgage insurance (PMI).

5. Establish what you can afford

Once you’ve saved for a down payment, it’s time to start thinking about how much you can afford to spend on a home. This includes not only the purchase price of the house, but also the ongoing costs of ownership, such as mortgage payments, property taxes, and insurance.
To get an idea of how much you can afford, start by looking at your monthly income and expenses. Make sure to factor in your debts, including credit cards, student loans, and car payments. Once you have an idea of your monthly budget, you can start shopping for homes that fit within your price range.

6. Compare mortgage rates

Shopping around for the best interest rate is important because the interest rate will determine how much your monthly payments will be. There are a few ways to compare mortgage rates. First, you can use an online tool like Bankrate’s mortgage calculator. This will allow you to compare rates from different lenders quickly and easily. Second, you can contact multiple lenders and ask for their current rates. Finally, you can use a broker to shop around for the best rate on your behalf.

7. Work with a professional real estate agent

Buying a home is a big decision, so it’s essential to have someone on your side who knows the ins and outs of the process. A professional real estate agent can help you find the right home, negotiate the best price, and handle all the paperwork involved in buying a home.

Following these tips can make the process easier and more enjoyable. With some planning and effort, you’ll be on your way to owning your own home.