If you're planning on buying a house within the next year or two you're probably saving for that down payment, earnest money deposit, and all the other expenses that come along with buying a home. But, sometimes rental payments can be as much is a mortgage payment preventing you from saving a lot of money. Here are five simple ways to say for a house while you're renting.
#1. Try to pay off any credit card debt.
Obviously, you're trying to save money but your credit score and debt to income ratio will be huge factors when it comes to applying for a home loan. Tackle that outstanding debt ahead of time and you'll be glad you did.
#2. Consider rent to own.
This option doesn't work for everyone but it is an interesting prospect. If you still need to save up cash for a down payment or build your credit score you might consider a rent to own agreement. You'll typically pay a one time fee called "option money" and this will give you the opportunity to purchase the house in the future. These price ranges are typically 2% to 7% of the purchase price of the house and will be negotiated with the seller. You may be able to rent the property for a specific time while you save money and put your rental payments toward the purchase of the house.
#3. Ditch all unnecessary purchases.
Cut back on so per Phyllis expenses such as dining out, that extra latte, or entertaining and instead, put the money you would've spent on the entertainment aside for a down payment. You can also round up your checking account. If you buy something at the store for $48.52, simply round up to $49 or even better, round up to the nearest $10 mark and before you know it, you'll have a nice cushion in your checking account.
#4. Save any windfalls or tax refunds.
Instead of spending those large tax refunds or windfalls on something fun, set all of that money aside. Before you know it, you may have enough for a healthy down payment.
#5. Find other ways to make money.
Perhaps you can get a roommate and supplement some of the income. Drive for Uber, lift, or one of the food delivery services. Have a garage sale or create something to sell. You might be surprised at how much site hustles can make you if you find something you really like doing.
Coming up with the down payment and earnest money can be a struggle but there are a lot of down payment assistance programs for low to moderate-income households as well. You can also speak to our lender about a good budget and plan of action moving forward. We can set up a budget for you, put you in the right direction, and give you an approximate timeframe with your income and expenses to buy a house.