Savvy Saving For First-Time Home Buyers

How is it that some people are able to afford purchasing a home at an early age? Of course, some people inherit or are given large sums of money. Some have high-paying jobs. But some people are merely good savers. It can be frustrating to see someone who is in your income bracket purchase a home when you're living paycheck to paycheck. Well, everyone has to start somewhere, and if you formulate a smart savings plan now and start using it, you'll be able to buy a home or condo in a reasonable amount of time. And you won't have to rent for the rest of your life!

Savings Basics

Rather than invest your money in CD's, stocks, bonds, or other financial instruments, try just using a basic savings account. For one, you want your money to be liquid—you want to be able to access it whenever you want. It's true that you won't—and shouldn't—dip into this savings account. But merely knowing you could will give you confidence and peace of mind. If you bought stocks with your money, for instance, and the price of the stocks went down, you might either have to take a loss on your investment or wait years before you could get your money out. So keep it simple: put 10% of your income in a savings account and don't touch the account.

Once You've Bought, Don't Stop Saving

With Kansas refinance rates and the refinance rates of many states as low as they are, it's useful to keep your savings plan going even after you've closed on your home. If you refinance, it may be useful to have money available to complete the refinancing. If you don't have money available, your refinancing rate may be higher.