What is the best way to save for a home?

Question

I am moving out of my parents house in March, what is the best way to save for a house by then (8 mos) and how much should I have saved?

Answer 1

There are a lot of programs out there now that offer no money down for first time home buyers. The biggest thing is making sure your credit is in check now and if it's not do the things you need to do to make it better. My husband and I were first time home buyers when we looked into purchasing a pre-existing home and all we needed to do was put together between 3 and 4 thousand for the closing costs on the house. As someone else suggested I would highly reccomend going and sitting down with a loan officer at a bank and just talk to them what your options are and how much you would need to put together. They can give you an idea of what you could potentially be approved for given your current income in comparison to your current debt. The lower your debt to equity ratio is the better your chances are for getting approved. The best way we found to save money was to have a seperate account to put our "house money" in, whether it's a savings account you already have or an account you open up brand new. Either way just start by putting away a little bit each week and you should be all set. The idea of talking to a loan officer is very intimidating at first but they are there to help you and it's their job to answer your questions and help you understand. Once you're ready to get serious about purchasing a home I would also highly reccomend a home owner education class, it's about 4 hours and is well worth it to be informed!

Congrats and good luck!

Answer 2

You normally need 20% of what ever the house costs down on a home to make a good dent and not have to pay a lot on your monthly morgage. The key now is to cut out all things you don't need which may mean roughing it for a while. If you have any debt try to pay that off first. You can do a prequalification with a lender to see how much you would be approved for now and that will give you an idea of how much money you'll need to save toward a house in your price range. Keep a separate account aside just for your Home.... It is a wise decision to buy your own home as you build equity in it and your credit will also improve.. congradulations on your decision and I wish you the best in your home search.

Answer 3

To add to what everyone else has said, Suze Orman (my favorite finance guru) talks about "playing house." Figure out how much more you'll be spending per month moving out on your own and put it in savings. Not only will you get used to managing your cash flow, you will also accumulate more in savings. 20% down is a good goal but not realistic this day in age. With as little as 3% down you may be eligible for an FHA loan. Good luck!

Answer 4

If you would have normally paid rent of like $500 a month but you are now at your parents living for free and still make the same amount of money, just save the money you would have normally paid for rent and utilities and use that as the down payment.

Pay yourself and put it into a savings account or something so you dont spend it!

Answer 5

If you put money into an rrsp fund, you can save up funds for the 8 months you have, and then use this money under the first time home buyers plan. That is what we did, we used enough to put down 25% with our first house.

Answer 6

Depends where you live. You should go get lists from Real Estate places and see what it costs to live in your town. Like anyone on here knows what the market rate is for wherever you live. Come on now

Answer 7

Read the book "Total Money Makeover" by Dave Ramsey. Lot of good info.

Answer 8

Go through an accountant. They are cheaper than most people realize and number crunching is what they are good at. Most offer first consults for free too.