If you want to buy a house, start by estimating what you can afford and making a budget to buy. Many prospective buyers find it difficult to accumulate enough cash for a down payment, especially if they are saddled with heavy debt. With some discipline and creative strategies, you can probably come up with more cash than you think. Check your current finances and investigate ways to save and raise extra funds.
Write down your monthly income, savings, and spending.
If you have a lot of high-interest credit debt, try to move your balances to cheaper cards and plan to spend a year paying off as much of that debt as possible.
Identify your long-term financial goals.
Owning a house may be one, saving enough for retirement may be another.
Make a home-buying savings plan.
Open a savings account just for this purpose and make regular deposits, even if you put aside just $20 a week.
Look for other sources of down payment funds, such as a Roth Individual Retirement Account (IRA).
First-time buyers now have access to $10,000 of these funds penalty-free under certain conditions.
Cut back on non-essential spending.
Your friends and relatives will understand that you can’t spend $20 to go to dinner and the movies if you say you’re saving to buy a house. Your children will understand, too. In fact, saving to buy a house can be a family activity.
Make saving for a house fun.
Chart your progress on paper and post it somewhere to remind yourself of your goal.