Tips for Saving Up to Buy a Home While on a Budget

If you envision yourself in a home in the next few years, you’ll want to start saving as much money as possible while still sticking to your existing budget. While it will most certainly take time and more than a little dedication to reach your goal, using a few expert tips is sure to make the task much easier without you having to make great sacrifices or interrupt your current lifestyle.

Start Building up Your Credit Score

One of the very first things you’ll want to do is start working on your credit score, and that’s even if you think your credit score is already more than acceptable to qualify for excellent rates on your mortgage. From now until you apply for your home loan, and even after, focus on making your credit card payments on time or even early when possible. Do your best not to take on any more debt if you don’t have to, and pay off as much of your existing debt as you can. Your credit score is pivotal to determining how much you’ll pay in interest for your mortgage.

Overhaul Your Budget

If you’ve had your budget for a while, it might be time to make a few adjustments to it. Sit down and look at your most current bills, debts and income. To help make sure you don’t veer off financial course, consider saving for your mortgage to be another monthly expense to take care of just like your other bills. In any case, do your best to make sure you’ve got more money coming in than you do going out.

Show a Pattern of Putting Money Back

When lenders consider offering you a loan, they’ll want to see proof you’re better at saving money rather than spending every dime you have. For this very reason, show consistency when it comes to putting money back for your mortgage. To make this as easy as possible, it’s a good idea to automate your mortgage savings so the same amount is taken out each time and on the same day every month. This also allows you to save for your mortgage without having to think about it.

Save Any Extra Money You Receive

If you get a bonus check, tax refund or any other unexpected funds, put them in your mortgage account rather than spend the money on something else. If you need car repairs or anything essential to protecting your ability to make a living, then go ahead and spend the money on that before saving anything you have left over. While it’s sure to be difficult to save your money rather than spend it, you’ll be glad you did when the time comes to make a down payment on your future home. Something else to think about is the fact that if your budget is airtight, you really won’t have a burning need for that extra money.

Save Money on Your Current Living Conditions

If you currently rent and will soon reach the end of your lease, consider moving into a less expensive place if at all possible. Doing so allows you to save on rent, but you can pretend as if you still have your current rent rate and save the extra portion for your new home.

Start Researching Lenders

Rather than wait, go ahead and look into mortgage lenders now. If you have a feeling you might have trouble qualifying for a loan, lenders like Donald Gayhardt and Speedy Cash specialize in short-term loans to unbanked and underbanked consumers. You might need a short-term loan to put down a bigger down payment to reduce the interest you pay over the life of your loan.

You don’t have to go to great lengths to put down as much money as possible toward your new home. Put these tips to good use and keep your eyes on the prize.

Published by Kidal Delonix (1198 Posts)

Kidal Delonix is a contributor to Mr. Hoffman's blog. The views and opinions are entirely his/her own and may not reflect Mr Hoffman's views.