Remember the first time you lived away from your parents? You likely lived in a small apartment or in a dorm room. It usually doesn’t take very long of writing rent checks to realize that you would like to own a home, someday.
Years go by and you still don’t have a down payment. Your credit still isn’t high enough.
But when the time is right, when the stars align, someday, you will buy a house.
You find a house that seems just right, in a great neighborhood, great price, it is perfect, but… You still don’t have a down payment?
That’s okay. The time just isn’t right for you. You just got to wait until the time is right.
Here is the problem. Time alone doesn’t make you more eligible for home ownership.
It does, however, take time to accomplish down payment and credit score goals. Don’t waist the following years waiting for it to happen on its own. Be proactive in your goals.
- Find out what you can afford. You can always buy cheaper but you must always stay in a comfortable range. Use this tool to help. http://acerealty.net/buying/affordability-calculator/
- Calculate 10% of your price point. For an example, if you figure you can afford a $100,000 house you should be making at least $2600/month. You should start to save $10,000 for a down payment.
- Make a Savings Plan. Set aside 10% of your paycheck a week before you pay your bills. You more than likely will find that you can live on 90% of your income just fine. Do you know how long it will take to save $10,000 at that rate of $260/month? 3 Years and 2 Months. If you can save more than that, great! The sooner you will be ready. Can’t save 10% a month? Then you need to be looking into cheaper priced houses.
Your numbers will actually look very similar no matter what price range you are in. If you are buying a house that is within the affordability calculator suggestion, and save 10% of your monthly income, you should have enough in 3 years and 2 months for the down payment.
- Get your credit score up! Here are some suggestions right from FICO.
What is easy to do is also easy not to do — Jim Rohn
When you are ready for the next step of shopping for a house, contact me! I would love to help.
Angie Uttecht 605-350-2553