Nearly half of house hunters don't think they can afford a home — these 4 tips can make it possible

With mortgage rates still high, 48% of US house hunters say they don't know if they'll be able to afford a home, according to a January 2024 poll from Credit Karma.

The study found that more than half (56%) of potential buyers aren't sure they can afford as much home as they had planned on.

Some are making concessions on square footage, while others are rethinking neighborhoods and school districts. Nearly a third of buyers said they're counting on money from family.

If you're having trouble affording a home, we've got several tips that can help.

The era of the 20% down payment is long gone, but homebuyers still have to shell out more to secure a sale than they have in years.

In 2024, the average down payment for first-time homebuyers was 9%, according to the National Association of Realtors. Repeat buyers averaged 19% down.

One way to get a down payment together faster is with a high-yield savings account (HYSA), which can accrue up to 5% interest annually, exponentially higher than the return you'd get from a traditional savings account. While there are other ways to invest, most HYSAs allow you to withdraw funds at any time with no penalty.

Western Alliance Bank's High-Yield Savings Account has no maintenance fees or limits on withdrawals and only a $1 minimum is required to keep the account open.

Another good option is UFB's Portfolio Savings account, which has no monthly fees and no minimum monthly balance requirement.

The better your credit score the more likely you are to get attractive mortgage terms. There are mortgage options for borrowers with credit scores as low as 500, but you'll likely have to put a lot more down and face much higher interest rates.

A FICO score of 620, considered "fair," is the minimum for a conventional loan. Even if you're doing better than that, taking six months to work on improving your credit score could cut your mortgage by hundreds of dollars a month. Focus on making on-time payments, polishing off existing debts and keeping your credit utilization under 10%.

For more help, there's *Experian Boost®, a free feature that links your Experian credit report to household bills not typically covered by credit-reporting agencies — like eligible rent, phone and streaming services.

States, cities and financial institutions all sponsor programs to help homebuyers. Many are geared toward first-time buyers or those in lower-income categories. The US Department of Housing and Urban Development website provides information on state-level programs.

California's MyHome Assistance program helps buyers finance their down payments with loans of up to 3% of their home's value.

New York City's HomeFirst loan program offers up to $100,000 for a down payment to qualified applicants with a household income under $79,200.

Bank of America's Community Homeownership Commitment program provides grants of up to $10,000 for a down payment and up to $7,500 for closing costs.

Wells Fargo Dream Plan Home program provides up to $5,000 in closing-cost credits for borrowers whose income is 80% or less of the area median when buying a primary home in eligible areas.

If high mortgage rates are the main obstacle, you can try to get an assumable mortgage. Under this arrangement, the buyer takes over the seller's mortgage at the same interest rate.

With mortgage rates still elevated, that could save you some serious money. Your options are limited, however, as only government-backed loans like FHA, USDA and VA mortgages are assumable.

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*Results may vary. Some may not see improved scores or approval odds. Not all lenders use Experian credit files, and not all lenders use scores impacted by Experian Boost.