Better Budgeting: 9 Ways to Help You Buy Your First Home

9 Ways to Help You Buy Your First Home

Guest Article (featured column)
by Bob Ward

It's more difficult for first home buyers now than when mom and dad made that fatal plunge into homeownership, but it's not impossible to wave goodbye to your landlord.

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Sure - it's more difficult for first home buyers now than when mom and dad made that fatal plunge into home ownership, but it's not impossible to wave goodbye to your landlord.

It's time to think about these simple suggestions:

1. It's critical that you make purchasing your first home an absolute priority by forgetting about new furniture or updating your car. Both of these diversions, whilst desirable, will take your focus off your goal and, just as importantly leave you with less money to achieve your homeownership goal.

2. Prepare a savings budget and stick to it. I know that it's hard work but it is really worth the effort. I don't know which is the more difficult project - preparing the budget or sticking to it. It's absolutely critical that you consider all necessary expenditure and don't make the budget so tight that it is impossible to achieve. During the budget preparation exercise you will suddenly appreciate that you can do without some items which you previously believed were fundamental to your lifestyle.

3. If all parties involved can cope with it, explore the possibility of moving in with mom and dad and save some of your rental expenses. You must place these savings in your special home account at the bank, savings and loan or credit union. Everyone must realize that this arrangement is only of a temporary nature and, after all, you may find that mom and dad really enjoy the company.

4. Try to curb any gambling instincts which you may have. There are only so many lottery winners who can buy their first home - the odds are always too long and, needless to say, there are never enough winners.

5. Keep your finger on the pulse of the housing market in the area in which you would like to and can afford to live. Real estate agents are happy to discuss local activity and price movements.

6. Check out home loans available for first home buyers. Some lenders offer concessions which are unavailable to other borrowers. You may wish to bank your savings with a particular lender who can help you in the future.

7. You may be able to borrow a high proportion of the purchase price of the property which you are buying because of your income. It's vital that you feel comfortable in making the required loan repayments if you borrow a large amount.

8. Don't go for broke with your first home purchase. It does not have to be the same quality as the home mom and dad have slaved for many years to own or as the home which you have been renting. The big difference is that this home is yours.

9. Remember your first home is exactly that. It is the starting point and won't be the only home that you will ever own. Once your loan and purchase have been settled the smartest thing you can do is to increase your equity in the property. This will happen in any event with the impact of inflation but you can help it along by increasing the frequency or amount of your loan repayments.

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Copyright © 2001 by Bob Ward. All rights reserved.

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