Homeownership is the American Dream. But if you’ve never owned a home before saving up for one can be a little daunting.
Here are a few ideas to get you started.
- Set a goal and a deadline. Studies show people perform better with a written goal and a deadline. Be as specific as possible!
- Pay off credit card debt, auto loans and any personal loans. This will make it easier to be approved for a mortgage. It will also help you get a better interest rate, saving you money over the life of the loan.
- Create a separate savings account for your down payment. This will keep you from spending the money and should generate excitement as your account grows.
- Talk to a good lender. Your lender will help you figure out what monthly payment you can afford realistically AND how much money you will need for a down payment. For example, did you know you could get a mortgage for as little as 3.5% down payment?
- Look for creative ways to save money faster. Are you getting a tax refund? Put it in your savings. Did you get a raise? Put the extra money in your savings. Can you get a side job?
Owning a home is great way to build wealth over the course of your lifetime. A new study from Urban Institute found the younger you are when you buy your first home the wealthier you will be at age 60.
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