Owning a home may be the great American Dream, but the obstacles to becoming a homeowner can make the whole process seem more like a nightmare.

You might have your pick of the best home mortgages available, but there are still a lot of hoops to jump through during the home buying process.

Fortunately, actually insurmountable obstacles are rare, and most can be overcome with a little elbow grease and determination.

Let’s take a look.

HURDLE:

The best you can currently qualify for is a sub-prime home loan rate.

SOLUTION:

First, get a copy of your free yearly credit report from the three major agencies (Experian, Equifax, and TransUnion) and check them for any errors. If you find any, follow each bureau’s procedures for getting them resolved.

Second, stop accruing any more debt or adding new lines of credit, and start paying down the debt you have. And, of course, make sure you make all future payments on time.

It may take you a year or two to fully recover, but in that time, you’ll not only have raised your credit score, you’ll also have lowered your debt ratio and developed better financial discipline.

If you need to be in a house sooner than this, some loan programs (e.g., FHA, Fannie Mae’s HomeReady, etc.) offer home loans to people with credit scores between 500 and 620. However, these programs do generally carry higher interest rates.

Another option is to have a co-signer who, in effect lends some of their credit history and reliability, to your loan. An important note here is that if you default on the loan, your co-signer will have to pay the balance.

HURDLE:

20% of a modern home’s price is a big chunk of change.

SOLUTION:

There are many low-, or even no-, down payment home loans out there.

The Veterans Administration zero-down loans for vets don’t require PMI, and the FHA has mortgage rates that only require a 3.5% down payment (however they do require PMI).

Depending on where you live, your state or city may have programs for helping qualified renters become homeowners.

HURDLE:

The ultra-low 3% rates in the early teens are long gone, and the expected trajectory for the next year or so is an upward creep. Obviously, the higher the rate, the less you can buy and the more you’ll have to pay for it.

SOLUTION:

As mentioned above, make sure your credit report is as strong as possible. The less of a risk you appear (typically reflected by your credit score), the lower home loan rate you’ll qualify for.

HURDLE:

You don’t make enough money to qualify for a home loan.

SOLUTIONS:

1. If you’re able or willing to relocate to a rural area, the USDA offers home loans to low-income borrowers.
2. Your profession (teacher and firefighter are just two) may qualify you for a city- or state-based low-income home loan program.
3. Side gigs are mostly good for earning a few extra bucks a month, but many of them (e.g. coding, dog walking) can be quite lucrative and even lead to a higher-paying full-time profession. If you’re only a few hundred dollars a month below the minimum, this might be your way in.
4. Co-ownership. You and another party can band together to buy a property such as a duplex. There are some financial and legal considerations, but home ownership today frequently requires more creativity than outfight cash.

PATIENCE…

Buying a house isn’t for the faint of heart or undisciplined. But it is possible. And the reward for your discipline, hard work, and yes, patience is a home of your own. And that’s a dream come true.