Ask 10 young renters what is keeping them from the American Dream of Home Ownership and you are more than likely to hear a common response. They just do not have the down payments. Well here are five ways to solve that dilemma.
- Make the Decision. All accomplishments great and small begin with a decision to get what you want. Make the commitment to becoming a homeowner and then speak that commitment to all who will listen. Tell your family. Tell your friends. Tell all who will listen, because in the telling you become a believer.
- Open a Down Payment Account, Not a Savings Account. Saving is unexciting. Rainy days may not come. Emergencies may never emerge. Retirement is a long way off. But a down payment account is real. When family and friends ask what you want for your birthday or Christmas, tell them you want a deposit to your down payment account. Open your account and you will be amazed at how fast it grows.
- Spend Less. The most immediate source of funds for your down payment account can come from money you already have. Write down everything you spend your money on and then ask item by item if they are more important than your goal of home ownership. Just think about it. Once you make the leap to home ownership, the odds are you will be an owner all your life. Over the years you will build equity. When that rainy day comes you can borrow against your equity and every time you make a payment you will be paying yourself.
- Make More. Unless you are already working three jobs and suffer sleep deprivation, you can make more money. Ask for overtime. Ask for a raise. Get a second job. Turn your hobby into a business. Think about it and you will be surprised that thinking makes it so.
- Get Professional Help and Begin by Choosing a Real Estate Agent You Like and Trust. In real estate, all commissions are paid by the seller, so your buyer’s agent is free. You can worry about commission later when you already are a homeowner. For now you get this one freebie. Use it. Your agent can get you with a lender who can in turn introduce you to all the down payment assistance programs. Your lender can advise you on how to improve your credit. Your lender can help Grandma write a gift letter. Then when it is time to find that first home, your agent can guide you. Your agent can get the seller to help with your closing costs. Your agent can help you with inspections and negotiate repairs. In the end your agent will be there to hand you your keys.
Welcome to your new life. Say goodbye to worthless rent receipts. You have transformed yourself from renter to owner. Congratulations!