Ready for a home, but aren’t ready for the down payment, furnishings, home repairs and moving costs? You’re not alone. Saving for your first home is one of the biggest investments and challenges you’ll face. Not much has changed with down payments in the last few years. 20% is generally the rule of thumb for most conventional loans. Some first time home buyer loans allow for less of a down payment. Do your research and as you research, there are some practical money saving ideas you can begin to incorporate now:
Pay of Debt – This is important. There are unforeseen expenses before, during and after the home buying process. Put yourself in a good position and set yourself up for success by paying off as many expenses to prepare for the cash you’ll need when you’re ready to buy. This will also help your credit report and approval for financing when you’re ready to make an offer.
Buy a Starter Home – Too often, new buyers expect to “get it all” in their first home. You can love your first home, even without granite countertops, two bathrooms and stainless steel appliances. Good things come to those who are willing to be patient, save a little and invest in their home. There is a lot to be said for some sweat equity achieved from home improvement and learning new skills as it relates to caring for your home. Updating a home, a little at a time adds value so when you are ready to move up the home buying ladder, you have profit to use as a down payment.
Redirect Money – Buying coffee, cocktails with friends or eating our regularly adds up. Cut those expenses or in half and pool that money you save into a home fund. Spare change can add up fast and you’ll be surprised when you start finding other ways you can save and redirect money into your first home.