Now that we have our credit in order, lets see how much home we can afford with the money we have. You need to take a financial snapshot– this is taking a picture of all your assets and liabilities.
Look at your income, savings, IRA’s, 401 (k), retirement accounts, stock funds, money markets, and any other accounts.
-Make a list with current balances.
-Also make a list of what you owe, credit cards, loans, any out standing debt.
Eventually when you apply for a loan you will need this information anyway, so you might as well do it now. If you think you can’t afford a home, chances are you can’t. You either need to shop for a less expensive property, or don’t buy now and keep saving.
You can get a little help from Mom and Dad, pay yourself first, start a special saving account. You would be surprised as to how fast that money will grow. Tighten up your spending, think of something you don’t need and remove it from your spending- that extra latte, lunch, snack, dinner, movie, play… you get the picture. Take a part time job. Save your tax refund. If you’re a renter, get a roommate. Try not to tap into your retirement fund. There are many ways to get on the right track.
KEEP SAVING. Be patient! Even if you don’t have enough cash right now, build your down payment to boost your buying power. You can buy a lot more house for a lot less cash out of pocket when the market is soft. Buy when everyone else is selling. Remember if you can’t afford it, don’t buy it!
Go get started!