Saving up enough money to buy a new home while renting may seem like an impossible task. How are you supposed to put enough money aside while still juggling high rental rates? With some strategic planning, there is a light at the end of the tunnel. Here are some helpful tips to get you on the road to owning your first home.
One of the first steps to purchasing a new home is speaking with a loan officer. They can help you determine a comfortable borrowing amount and how much you would need for a down payment. Some people are under the impression that you must have a 20% down payment to buy a house, but that may not be the case. A loan officer can help you find the right mortgage program and the required down payment may not be as much as you think. You can reach out to the Stanley Martin Homes preferred lender, First Heritage Mortgage, to get started.
Once you know the amount you’ll need for a down payment, you can start to put a plan together. This is the perfect time to review your household budget. And if you don’t have one, a great time to create one. Allocate funds for mandatory bills and try to cut out expenses that you can do without. Maybe you have a subscription service that you’re no longer using or can skip eating out and make more meals at home. You can even automate your saving through your bank. This one will take some thought and planning but can help you reach your savings goal a lot faster.
Reviewing your household budget will also give you a great snapshot of your monthly debts. Getting rid of these can greatly free up your funds for a down payment and can make it easier to qualify for a mortgage. One of the most straightforward debts to tackle is credit card debt. If you have multiple credit cards that carry a balance every month, figure out which one has the highest interest rate, and start paying off that one first. There are different credit card payment strategies that you can utilize, just make sure the one you choose is comfortable for your budget and try not to use the cards while you’re in repayment. If you have student loan debt, you can try refinancing or consolidating your loans to possibly lower your monthly payments as well as the interest.
If your income alone is not enough to maintain your monthly household bills and save for a down payment at the same time, try picking up a side gig to make a quick buck. Become a personal shopper for a delivery service or spend a few hours driving for a rideshare service. Maybe you have a hobby that you can monetize. If these ideas don’t suit you, there are tons of other freelance opportunities with very little qualifications to get the extra cash that you need for your new home.
Many people hear “downsize” and think “live in a box” but that doesn’t always have to be the case. You can downsize the amount of stuff you have that’s just collecting dust around your house. Know someone having a garage sale? Ask to take part. You can also use the various online marketplaces to sell items that you no longer need and get some additional funds for your down payment – and de-clutter your space at the same time!
It takes a great deal of planning to buy a house and even more to save up for one while renting. But with a solid plan in place and a great team to help, it can be done! Once you’re ready to get started with the homebuying process, you can visit our website to find the best home that suits your needs.