Buying your first home is exciting, but it’s no secret that is can be overwhelming, too. One of the biggest stressors for first time homebuyers tends to be figuring out how to save for a house. If you want to become a homeowner but are wondering how to make financial sense of this goal, we can help.
First of all, talk with one of our loan officers. You may be pleasantly surprised to find that you won’t need to as much saved up as you expect, or you may be closer to getting qualified than you thought. Even if you are not ready yet, we can help you decide what to focus on, whether it’s raising your credit score, saving toward down payment and closing costs, or addressing your DTI. Contact us any time to learn more about preparing to save for a house, whether your first home or not.
Helpful Ways to Help You Save for a House
Figure Out How Much You Need to Save for a House
Figure Out How Much You Need to Save for a HouseBefore you get started on saving, it helps to know what your goal is, by knowing your goals you know exactly how much you need to save for a house in order to meet your desired goals. This is part of the benefit of talking with a loan officer, who can help you determine how much you are qualified to borrow and what your anticipated down payments and closing costs might be.
Of course no one can tell you exactly what the total will be, due to varying factors like interest rates and the unique features of the home you end up buying, but having a ballpark figure will help you set your goal and begin to work toward it.
You may be excited to learn about the many first time buyer incentives and supports. Don’t assume you will need to save a massive down payment. Most first time buyers can qualify to put down as little as 3%, and may even qualify for assistance beyond that.
Two Ways to Save
When you are working to save for a house, there are basically two angels from which to work toward the goal:
- Increase your income
- Decrease your expenses
Simple, right? The first step in either of these strategies is making sure you have an accurate picture of your current finances. If you do not already follow a budget, look back a few months and honestly track your spending. This will help you decide if you need to increase your income, decrease your spending, or both in order to save for a house.
Consider Temporarily Downsizing
One of the biggest ongoing expenses in most peoples’ budgets is housing. When you are working to widen that gap between income and expenses to save for a home, making a change to your housing can be a great way to do this.
Downsizing temporarily can allow you to save a significant amount of money. Whether it is moving in with family, taking in a roommate, or actually moving to a more affordable rental, this can create major opportunity to save. Remember, you are working toward a goal that will create more financial opportunity and generate wealth for your family, so it is worth the temporary sacrifice to get there.
Monetize Your Skills
If you are looking for ways to increase your income, there are plenty of ways to do this. Remember that you don’t necessarily need to change careers or increase your income long term; you just need to create more difference between income and spending to save for the purchase of a home.
It may be as simple as getting a part time job for a few months and putting all of that paycheck toward buying your first home. If a traditional part time job is not the right fit, consider what skills you have that can be monetized. Get creative to work toward your goals, with ideas like these:
- Write an e-book with information you have learned from a hobby
- Record a workshop you can sell online
- If you have a good camera and photography skills, consider hosting mini photo sessions at an affordable rate for friends and family
- Offer your services for seasonal needs like holiday light installation, gift wrapping, or swimming lessons
We never want you to feel overwhelmed by the thought of buying your first home, whether that be stress from trying to save for a house, looking at homes, or settling in, we are here to help you along the way!
When you are ready to learn more about buying a home, how to save for a home, or start searching for the perfect property contact us any time to find out how we can help you reach your goals.
