Three Ways To Prepare For Buying Your First Home — Years In Advance
It's never too early to begin to prepare to buy your first home. Upon finishing college and joining the workforce, you may renting for a few years. But instead of renting for longer than you have to, keep the goal of buying a house in your mind. There are several things that you can do right now to put yourself in a better position to complete this major purchase in a timely manner. Take this approach, and you'll find that you're enjoying the financial benefits of home ownership long before many of your peers. Here are three ways to prepare to buy your first home.
Start Saving For A Down Payment
The down payment can often be the biggest obstacle in your way when you want to buy your first home — but that's only if you're short on funds. To avoid this pitfall, set up a dedicated savings account and begin to add to it. Do so even if you don't plan on buying your first home for several years. The longer you wait, the more money you'll have to help yourself get into whatever dwelling you want. Don't be afraid of making small, regular contributions. Even $50 every week gives you more than $2,500 a year that you'll be saving.
Don't Owe Too Much
It's easy to get into debt when you're just starting out in the workforce, especially if you don't make a lot of money. Owing a lot can impede your ability to secure a mortgage, so be careful about assuming more debt than you need. For example, it's fine to make car payments, but you shouldn't be paying payments on non-essential items such as a big-screen TV. Similarly, if you're a big spender who takes out bank loans to cover your costs, this can be a bad idea. When you're ready to buy, a bank will review your entire financial situation, and you may learn that you need to pay down what you owe before you can get approved to buy your house.
Don't Accumulate Too Many Possessions
Another idea to keep in mind is that you should try to avoid accumulating too many possessions. Doing so can make you feel as though you need to buy a larger home than you actually need when it's finally time to buy. If you keep your purchase of possessions moderate in the meantime, you'll be comfortable moving into a smaller home, which is what many people do for their first purchase.
