By Lois Center-Shabazz
Buying
a house is not as difficult as you may think. First of
all, you must understand that you "can't have it all," so
discontinue that form of thinking. You must curtail your
spending in other areas. Home prices are up all over
the country, but you can still find affordable housing
in the
way of a cosmetic fixer (that is a fixer with no major
repair problems), or anxious seller. Owning
a home includes the monthly payment of P+I+T+I, translated,
this is the principle, plus interest, plus taxes, plus
insurance, which, added together, equals the total monthly
payment.
Understanding the P+I+T+I for different loan amounts
will enable you to better prepare for home ownership. For
example, if you could afford $1400, total for a P+I+T+I
monthly payment, determine what price home would fall into
this price range.
Search the Internet or anonymously call mortgage companies for quotes.To
purchase a home there are home loans which require 0%,
3%, 5%, and 10% down, plus the closing cost. The lower
the down payment, the better your credit should be, to
get a reasonable interest rate. The standard down payment
is 10%, but 0% is becoming popular.
Ideas
for saving for your new home could include:
1. Selling
a car or furniture: Many of us have an extra car or a car
with excessive monthly payments, insurance, and gas. Sell
the car you are not using, or in the case of the overly
expensive car, sell it to purchase an affordable model.
2. Get a part-time job and save the income for your
home: Even if the job is every other weekend, it will help.
3. Temporarily discontinue a whole host of unnecessary
things: movies, parties, vacations, clothes, cable TV, voice mail,
newspaper, and excess clothes shopping.
4. Use your tax return: Put it in the bank toward
your down payment. After purchasing your home, speak with an accountant;
find out how many more exemptions you can take during the year, so
you can use your future excess taxes on your monthly payments.
5. Use a windfall, such as an inheritance or large
bonus: Take this money and place as much as you can afford on your
down payment.
6. A few of you can live with your parents or in-laws
while saving money: There are a few parents or in-laws who will be
willing to work with you.
7. Ask for cash as gifts: When you have a birthday,
graduation, wedding or any other celebration, explain to family members
in advance that you are saving for a home.
As
I said at the beginning, it is not as difficult as you
think. Now that you have my list, you can also think of
more ways in which you can save for a home.
Lois Center-Shabazz is the founder of MsFinancialSavvy.com
and author of the 3-time award-winning personal finance book,
Let's Get Financial Savvy! ISBN #0971979502.
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