Saving up for a home is a gargantuan responsibility, whatever your financial position is right now. It takes time to do, too, especially with a housing market as competitive and unpredictable as the current one.
Still, there are big and small steps you can take to make sure you are prepared for the road ahead of you. You can even make it easier for yourself to save up. Just make these smart money decisions early on to save up the money you need to buy a house in the near future or even a few years down the line.
From adjusting your financial habits to making strategic home-buying choices, these are a number of ways to help finance your home:
- Look around for the best mortgage rates
Different mortgage lenders offer different mortgage rates, so don’t just settle for the first one you find. Visit around four or so companies to get quotes from. This also familiarizes you with the costs that go into paying for a mortgage.
Speaking with various lenders is also a good way to find out if there are representatives that you prefer doing business with. This can also influence your final decision later on.
- Set up a timeline
Nothing is quite as motivating as a deadline, isn’t it? Create a timeline that details your goals until your ideal purchase date.
Before detailing your timeline, take into consideration your current monthly income, expenses, and debts. Knowing these allows you to make a plan that is practical for your current financial situation.
When you’ve started saving, it also helps to keep referring to your timeline to track your progress and stay faithful to your savings plan.
- Automate your payment and savings transfers
A simple task that prevents you from missing your monthly deposits is to schedule automatic transfers. When you let your savings account automatically take the money out of your bank account on a regular basis, you will not have to worry about the possibility of forgetting to deposit.
It isn’t just your savings that you should make automatic deposits for. Debts, such as electricity bills and other utilities, should be paid online regularly, too. When you always pay your debts on time, you help your credit score and improve your debt-to-income ratio, both of which affect your ability to get a mortgage and the kinds of mortgages available to you.
- Downsize and cut down on unnecessary expenses
Some great investments require a few sacrifices. You are able to save more in a shorter span of time by living below your means and directing the money you save to your home savings.
For instance, see if your household can afford to sell a car to cut down on expenses. Decluttering and holding a garage sale for stuff you don’t need also helps to add to your savings.
Let go of some luxuries, too. If you and your family often eat out or order food for weekend dinners, minimize spending by cooking your own meals for now. Control your buying habits, too, and stop yourself from making impulse purchases to stay on schedule.
- Have a staycation instead of going on vacation
The summer is usually for taking those long overdue vacations, but consider passing on those trips during this season. Vacations out of town, while fun, eat up a chunk of your budget and could hinder you from reaching your goal.
Still, you don’t have to completely deprive yourself of a vacation. Opt to have a staycation instead by simply visiting local attractions and finding interesting places you can visit for free in your area. This could even be an opportunity to find amazing hangout spots that you were previously unaware of!
- Look for a house that you can do reasonable repairs on
Any reasonable home buyer would prefer to purchase a home that is spick and span and flawless, and understandably so. This means that there is likely to be stiff competition for the “best” houses in the market and those will cost more.
Finding a home that you can do a few little renovations on may be the more cost-effective choice for you. Be sure to take note of the costs for renovating the home you are eyeing, however, to make sure that remodeling and repair costs will not just exceed the cost of buying a new house entirely.
Purchasing your own home is a big move for anybody. It often takes over a year or so, but you can make the process easier for yourself by saving early and having a solid plan.
