Apr 29, 2024

A Few Helpful Tips and Tricks for Middle-Class Homebuyers 

Are you one of the millions of middle-class homebuyers planning to house hunt this year? 

Middle Class: The income class in between lower class and upper class. Middle class is right in the — you guessed it — middle! In 2024, Americans who earn between $50,000 and $150,000 are considered middle-class. Right around 50% of the current population falls into this income class. 

If you’re a part of the middle class, congratulations! It’s a great place to be. In fact, the middle class has long been considered the engine of the American economy. 

But, if you’ve been following the news over the past few years, you may have heard that it’s shrinking. Affordability has been a challenge for Americans everywhere, including those in the middle class. If you’re hoping to become a middle-class homebuyer in 2024, don’t let this fact scare you away.  

We’ve gathered some top tips and tricks from mortgage professionals in the Motto Mortgage network to help grow your knowledge, build your confidence, and overall achieve homeownership. These include:  

  • Finding the right time to buy 
  • Choosing the right loan 
  • Discovering relevant homebuying programs 
  • Budgeting for unexpected expenses 
  • Building your best homebuying team 

Finding the Right Time to Buy 

For middle-class homebuyers, timing is everything. That’s because most middle-class buyers probably won’t be offering all cash or securing a second home. 

According to Candice Panariso, Broker Owner and Loan Originator at Motto Mortgage Financial, the right time just might be now. 

“My best tip is to buy sooner rather than later,” she says. “All the market data and commentary we’re hearing supports that there’s significant pent-up demand. Once we see rates start to decline, we’ll see those buyers who have been waiting on the fence start to jump into the buying process. More demand tends to mean higher prices.” 

And don’t let interest rates scare you off, as they’re not necessarily forever. “As the saying goes, you can never change the price you bought the home for, but you may be able to refinance to a lower rate,” Panariso said. 

Choosing a Loan That Fits 

If you’re one of millions of middle-class homebuyers, the well-selected mortgage loan could make or break your financial situation. You’ll want to study up (with the help of a mortgage pro) on popular, lower-cost home loan options. 

Mary Babinski, Loan Originator at Motto Mortgage Champions, offers some great insight. “The most popular mortgage options are FHA, VA, USDA, and Conventional,” she says. 

Or you could even pursue a multifamily home loan. “An excellent purchase option may be the newly approved multifamily purchase mortgage where Fannie Mae has lowered the down payment required (now just 5%) on 2-, 3-, and 4-unit homes,” Babinski says. “With this loan option, middle-class buyers can live in one unit and rent out the others. This may be a perfect option for those looking to exercise investment strategy and wealth creation at the same time.” 

A dedicated mortgage professional can help clarify which loan option might be a good fit for you and your family. 

Discovering Relevant Homebuying Programs 

If you’re a first-time homebuyer in the middle-class, there could be even more good news! 

“There are first-time buyer programs available that can assist with closing costs and down payment,” said Babinski. “You must fit the income parameters and additional guidelines, which will vary by program, state, and county, to qualify.” But this could offer another path forward for dedicated, middle-class homebuyers. 

Middle class homebuyers looking at houses on a tablet

Budgeting for Unexpected Expenses 

For many middle-class homebuyers, one unexpected expense could spell disaster. You’ll want to be prepared for anything. 

“I tell all my clients the same thing: It doesn’t matter how good your home inspection is, within 30 days of closing, something in your new home will break,” said Panariso. “We always hope that it’s a small expense, but it’s important to anticipate that and make sure you are leaving yourself enough reserves to handle those unexpected expenses.” 

“Other items to budget for that are often overlooked are increases in property taxes and homeowners’ insurance,” she added. 

Building Your Best Homebuying Team 

Rarely can middle-class homebuyers go it alone. You’ll want to have the right team on your side to help ensure your home purchase goes off without a hitch. 

“I would make sure to utilize a mortgage broker you know and trust who can walk you through the options in detail so you can make an educated decision on the best mortgage product for you and your family,” suggests Panariso. 

Don’t forget a standout real estate agent, either! 

Final Thoughts: A Path Forward for Middle-Class Homebuyers 

Middle-class homebuyers are in a unique position. They often have a goal of homeownership, but they might not have endless resources to make it happen. 

By finding the right time to buy, choosing the right loan, exploring relevant homebuying programs, budgeting for unexpected expenses, and building the right team, middle-class homebuyers just like you might be able to make their dreams of homeownership a reality. 

And don’t worry. The dedicated home finance pros in the Motto Mortgage network will be here to help, every step of the way! 

* Specific loan program availability and requirements may vary. Please get in touch with your mortgage advisor for more information.