Are you a first time home buyer? There is no feeling more exciting than purchasing your first home! A space all to yourself with a fresh slate on putting your own touch to it. However, before you get too excited about the dreamy aspects of owning your own home, it is important to face reality first. What are some habits that you can get yourself into that will prepare you for the financial responsibility you are going to face when it comes time for you to own a home? Let us help you get started on the planning ahead.
- Create a savings account – and dedicate this account to be used to purely save money for your down payment. Keep in mind that down payments are at least 5% and commonly upwards to 20%. Being able to comfortably make these down payments is a key factor in homeownership. By dedicating a savings account that you will not touch to save your hard earned money away for a down payment will be a good way to track your progress and know how much house you can afford.
- Cut down on “wants” – little spending habits that you have been getting away with up until this point really can add up and cost you a lot of money when you really put a calculator to it. Cutting down on morning drive-through trips or maybe staying in for a home-cooked meal more nights of the week can help save you money on things that are at least manageable. While having fun in life is very important, now is a time to get creative on money-saving ways that you can still have fun yet start being more responsible in your money spending habits.
- Make sure you are keeping up with paying your bills – a huge factor in getting approved for a mortgage in order to buy a home is by having a good credit score. Build your credit score to the best that it can be before it is time to get approved. Pay your bills on time and keep tabs on the progress your credit score is making.
- Play pretend – bring out the child in you by playing pretend homeowner! Each month, take a look at your bank account and see how much money you have in there to spend on homeownership. After paying the mortgage and some other maintenance costs that may come about, do you have a comfortable amount left over for living and other payments you may owe? If thinking about taking those payments out of your account each month scares you, it may be a sign that you need to start saving up some more and give yourself more time. The good news is, if you start getting into these healthy financial habits now, the bigger your smile can be when you reach this last step as time goes on!
Homeownership is within your grasp! There is no sweeter feeling than being able to truly earn your way to your dream home and we know you can do it.