CHOOSE YOUR BUDGET:
Decide how much you can comfortably pay before even looking at houses. The bank estimates of what you can afford may be very different from what you can afford.
Include all the expenses associated with owning a home in your budget. These can quickly amount to several hundred dollars in additional monthly payments.
The amount of money you’ll need for a down payment will depend on how much house you can afford. A 20% down payment is ideal to avoid paying private mortgage insurance, which may easily add hundreds of dollars to your mortgage.
However, it is possible to qualify for a suitable mortgage loan with a down payment of at least 10% if you reside in an expensive location and have a strong credit score (700 or more).
PAY OFF YOUR DEBT:
If It’s best not to spend more than a third of your income on housing. However, debt from a car loan, student loans, or credit cards could hinder your ability to put down a larger down payment on a house.
Think about paying off some of your debt first, which would ease some of the financial burdens and help you get a better mortgage rate.
While paying down debt to save may seem contradictory, once those bills are paid off, you could have hundreds, if not thousands, of dollars freed up to help you save more quickly.
PAY YOUR FUTURE MORTGAGE NOW:
Put the difference between your rent and the estimated future mortgage payment into your savings account and treat it like any other monthly bill you’ll have to pay.
As a result, you’ll get acclimated to the concept of paying a larger mortgage, and you’ll also be saving for your house at the same time.
PAY YOUR SAVINGS ACCOUNT FIRST:
Before they put money into a savings account, many people wait until the end of the month to see how much they have left. It would be best if you never did this. Most of the time, you won’t have any money left.
First, you need to figure out how much money you can put away for the long run. It may take some getting used to, but you will begin to adjust once you start putting money away.
If it’s tempting to tap into your savings account, keep it in a separate bank from your checking account.
CUT YOUR EXPENSES:
To save money if you’re already living paycheck to paycheck, start by cutting your costs by 10% all over. So, if your monthly grocery shopping budget is $600, try cutting $50 to make it $550.
Reduce your monthly cable bill. Cancel a few of your streaming services. Instead of going to the gym, consider riding your bike to work.
When you apply this method to all your costs, a small amount of money here and there will add up over time. However, you’ll soon have enough money saved for the down payment.
THE BOTTOM LINE:
Remember that saving money takes time – slow and steady wins the race.