Saving
for a Down Payment on Your First Home
If you've been
dreaming about buying your first home,
you've undoubtedly experienced more than a
little discouragement, especially when it
comes to saving enough money for a down
payment. If that describes you, I have some
good news: you may be able to get into that
home quicker than you realize. Because of
all the many loan programs available, you
might not need a large down payment. You can
buy a home with nothing down if you have a
decent income and credit.
A little money in
the bank makes your home financing more
attainable. You will get better interest
rates and lower mortgage costs, plus you
will qualify easier. Here are a few
suggestions on how to save for your first
house.
First, set a realistic savings goal. It's
important to set a figure that's attainable
if you want to have success, but that will
generally mean that your first home will be
smaller than your ultimate dream home. But
there's nothing unusual about that. It's
entirely possible that you won't get your
dream home on your first try.
If you've been living in your parents' home,
you may be surprised to learn that they
probably traded up at least once, and
probably more than once, before they were
able to move into the home you now know.
They worked hard to get where they are, and
you're going to have to work just as hard,
so don't expect to start at the top. After
all, you couldn't afford a $600,000 property
with a $30,000 income, anyway, no matter how
hard you budgeted, even if you managed to
save enough to get into it in the first
place.
The next step is to create a plan of attack.
Find your affordable target area and then
get to know the market in that area. You
want to know what's available and how much
homes are selling for. In essence, you're
becoming a shrewd shopper. You'll know
approximately what homes are worth as you
drive around the area, because you've done
your homework and you've become an expert in
that area.
Part of your plan is to set up a budget that
includes an honest appraisal of your income
and expenses. If they're about even, you'll
have to begin economizing somewhere to
create a positive cash flow that can be
channeled toward your down payment. You'll
probably need to pay close attention to your
finances for several months to find places
where you can trim expenses, but you can do
it! Pay down all your credit cards, because
they might cost you the chance to qualify
for your new home, even after you've
accumulated the down payment.
As you're saving, seek out professional help
from a knowledgeable real estate agent and a
helpful lender. They'll both prove
invaluable. There are a number of programs
available for first-time homebuyers, and
when you finally find the home you want,
you'll need as much information as possible
about what the seller needs and about your
financing options. That way, you can
structure an offer that will satisfy the
seller's needs while keeping your payments
at a manageable level.
It will take time and sacrifice, but
millions of buyers have been successful in
purchasing their first homes over the years,
so there's no doubt that you can do it, too!
Zero Down Home Loans
Copyright © 2006 Jeanette J. Fisher
Jeanette Fisher helps first-time home
buyers with credit issues to improve their
credit. She also teaches beginning real
estate investors how to qualify for multiple
real estate loans.
Free "Credit Tips
for Mortgage Financing" at
Real
Estate Credit Help Center.
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