How Young Parents Save for a First Home
Accumulating savings for an initial home purchase presents a significant hurdle for young couples who are also managing the responsibilities of parenthood. Navigating family life in the unpredictable economic environment of the 2020s is challenging on its own. When the goal of accumulating a substantial sum for a home down payment is factored in, the task becomes exceptionally daunting. The first course of action for many parents involves revising their monthly financial plan. Subsequently, they often look into securing a personal loan to eliminate credit card debt, seeking advice from a trusted real estate agent, accepting a part-time position, and investigating rent-to-own home opportunities for any advantageous offers. Examine the suggestions listed below to see which strategies might kick-start your campaign to set aside funds for the purchase of your first home.
Revise the Monthly Budget
Look for personal finance challenges and holes in your budget and make commonsense revisions. The general aim is to make an automatic set aside for a down payment account. Consider working with the bank to create a direct deposit payroll deduction of a fixed percentage every payday. Explore making cuts with line items like discretionary spending, cable TV subscriptions, and similar expenses that can be reduced or eliminated. Speak with a licensed realtor to find out how much a typical down payment is in the neighborhood where you’re looking. Realtors can give solid advice about closing costs and other first-time buying expenses.
Get a Personal Loan & Pay Off High-Interest Debt
Younger dads and moms who use personal loans to banish high-interest credit card debt are taking a decisive step toward homeownership. Of course, it’s all too easy for parents to get underwater in card debt. That unfortunate situation is particularly true when working adults have more than one card account. Fast rising interest rates can turn a standard credit card into a nightmare in a short period of time.
The good news is that there are several realistic alternatives that allow moms and dads to consolidate all their high-interest debt and make monthly bill paying easier than ever. Personal loans can do all that and more because they also let borrowers take advantage of more favorable interest rates. Switching card debt for a personal loan makes sense from every perspective. Not only can you select the lender you want to work with, but you can get a more flexible arrangement, better terms, and a faster route out of debt. At that point, it’s much easier to focus on long-term financial aims for your family.
Consider Rent-to-Own Properties
Rent-to-own real estate is a popular choice among first-time buyers who have not been able to save enough cash for a down payment yet. The way it works is simple. Sellers agree to let you live in a house for about two years while you make payments that consist of a monthly lease payment and a portion that is set aside for a potential down payment on a purchase, should you decide to buy the property when the short-term lease is up. In most cases, if you decide to bail out of the deal at the end of the rental period, you’ll lose the built up down payment savings that have accrued.
But, for those who do decide to buy, they get the benefit of having an account already funded and ready to go. RTO can be a solution for young people who want to take a different approach to saving for a first house. The beauty of the strategy is that you get to see and experience ownership before becoming legally obligated to a long-term mortgage loan. Plus, most RTO deals allow renters to share repair expenses with the owner. That way, you’re not on the hook for a major bill if something needs to be fixed during the lease term.
