Anyone Can Become a Homeowner

HomeownerDays until closing: 1

Well, we are getting very very close to be homeowners!!! It is both extremely exciting and extremely scary. LD made things a lot easier to stomach though when he realized and informed me that with the final paperwork for the loan, we will only be paying about $16 a month more for the house mortgage than if we had decided to stay at the apartment. Yes, they were raising the rent by $50 a month (more than 5% increase!) in order to “stay in line with the other rent in the area.” When did landlords get so much power? Oh yeah, when the recession hit and fewer people are buying houses and so we have a rental property shortage, which causes landlords to put the rent as high as they want, which causes fewer people to be able to save up for a down payment on a house, which causes even more people to need to rent. This is a terrible spiral people!

However, I firmly believe that anyone can save up to be homeowner. It probably won’t be as fast as LD and I did it, but it isn’t about speed, it’s about achieving a dream. The biggest thing to do to get there is to simply live below your means. I have written many posts about how to budget and save money, check them out to get you started! Many are in the “MoneyWise” category on this blog. You might have to make some big decisions including whether you need new work clothes or whether you can squeak by for another year, but it will be completely worth it in the end.

1. If you have a lot of loans, focus on them first. If you can pay more than the minimum and snowball the debt, you will save more money, faster later. To snowball, pay off your highest interest rate loan first and the minimums on the rest, and then when the top loan is paid off use the money you now save to pay off the next.

2. Work on making sure your credit is good now so you can get a better interest rate later.

3. Keep track of your accomplishments toward savings. It will keep you motivated.

4. Make saving up for a house a priority. Priorities get done, dreams get pushed off until you feel like you have the time or it is the “right time”. (You will rarely get the time and it will never be the “right time”. Just go for it!).

5. Keep your expectations in your price range. Check out this post for what is a reasonable price range. Price ranges can change though with a bigger downpayment.

6. Change to a cheaper rental property in order to save more money for the house. Cheaper doesn’t necessarily mean worse, just means different landlord or less updates. You can also look in different areas. If we were to have moved to an outlying town, we would have saved about $250 a month on a similar sized apartment.

7. Sell some of your stuff that you don’t need anymore.

8. Open a savings account specifically for house savings with a high interest rate. We used Capital One 360. We loved that they had a savings goal tool that told us whether we were on track or not and kept track of our progress. They also offer 0.75% interest, which is one of the higher ones we found. If you would like savings to be automatic, you can do autowithdrawls from one account to another on the savings plan.

9. Save any way you can. I have written a couple of posts on how to cut spending, how to save money, and how to make a budget.

10. Keep your grocery bill in check by making meal plans every week, buying fresh in season or frozen, and keeping at least a few meals a week as “penny meals”. See the “Stuff your Belly and Your Wallet” series for some penny meal ideas.

Also, it is never too early or too late to start being more money conscious. With hard work, dedication, and tough choices, you can dig yourself out of almost any financial hole. You might have to get creative (no that does not mean illegal drug trade or anything like that), but perhaps picking up an extra, not-so-glamourous job might be a big help. I hope those of you who aren’t currently homeowners may someday achieve your dreams.

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About Danielle Beranek

Life can get away from you when being young, married, and still fairly fresh out of college. Taking on a pet, student loans, going back to school, and soon a new house is enough to leave ones head spinning. For me, life is crazy, but only on the outside.
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