Tips for Saving Up for Your First Home

Today it is harder than ever to buy a house. Prices for homes have skyrocketed during the last decade making it even more difficult for young first time buyers to succeed at ultimately purchasing a place they can call home. Saving for a house is not an overnight process, and it takes a great deal of time and strategic money management. You can begin this process by speaking to a lending institution. They can help you learn all you need to know about what you can afford, interest rates, and the type of loans that are out there for you. They will be knowledgeable about important information.

One of the main components of saving up for anything, especially a house, is to cut back on luxuries. For example, if you are someone who tends to eat out for every meal then you might want to consider cooking at home for a change. If you are an avid gym-goer then taking up running, instead of paying for your membership, would be a great money saving move. Also consider cutting back on cable, learning to optimize your gas, and even raising your car insurance deductibles. Although these are some helpful money saving tips, you do not have to give up every luxury you enjoy. Just remember that the more you cut back on, the more you save, and the more you save, the closer you are to buying a home!

Now for some of you I must ask that you keep a very open mind to the next money saving suggestion. Here it is… Move back in with your parents. Even if you have to pay your parents some sort of rent to live back at home, you will be saving money. Think about the free utility, free laundry, and of course home cooking! If this advice is taken it will only put you into your very own home faster.

For such a thing like buying a house, you are allowed to take money from your 401(k). Although lenders don’t view this as a debt, the money still needs to be paid with interest over a time period of years. Remember that it is best to stay with your current employer until you have fully repaid all the money because if you leave your employer you will have only 90 days to repay the money. View all your options before you take funds from your 401(k). Make sure that there is a greater benefit from taking these funds than alternatives such as a paying for mortgage insurance or a second mortgage.

Keep in mind that the road to buying a house can be a long one. Consider speaking with a lending institution and the valuable tips for cutting back on spending. Also consider the idea of possibly moving in with your parents , even though it doesn’t sounds like the most desirable option. Once you have stabilized good money management you can consider options such as taking funds from your 401(k). If you take the advice given then the time it takes you to purchase a home can be exponentially decreased.

Anything to Add? Leave a Comment!

Leave a Reply