A few tips to consider as a first time home buyer.
1. Figure Out How Much House You Can Afford First
The first step is to find out how much house you can afford. A good rule of thumb is the 28 percent / 38 percent rule which states that you should spend 28 percent or less on home costs and 36 percent or less on total debts. Also, you can use an online calculator or speak with a financial advisor to determine what you can comfortably afford each month. Once you know this number, start saving for your down payment.
2. Pay Off Your Debts
San Antonio is among the top 5 cities with the highest credit card debt in the US. This means that people have a hard time paying for their debts, which hinders them from making investments like buying a home. If you have debts, it’s essential to pay them off before you start saving for your home. That’s because the less debt you have, the lower your monthly payments will be, and the more money you’ll be able to put towards savings. Also, having a lower debt-to-income ratio will make it easier to qualify for a mortgage.
3. Eliminate Some of the Monthly Subscriptions
Do you have any monthly subscriptions that you can live without? If so, cancel them and put that money towards savings. For example, if you spend $30 per month on a streaming service, that’s $360 per year that could be going towards your down payment. Unsubscribe from the membership services you don’t attend and start saving for your home.
4. Automate Your Saving Process
Data by Pew Trusts shows that 45% of people who are in a position to save money find it hard to do so because of emergency expenses during some months. The best way to save money is to automate the process. This way, you’re not even tempted to spend the money because it’s not readily available. You can do this by setting up a direct deposit into your savings account from your paycheck. You could also set up automatic transfers on certain days of the month.
Looking To Buy Your First Home in San Antonio, Texas?
The Schrader Group can help you buy your first home in San Antonio. We can also advise on the neighborhood you’d love using key insights and comparative market analysis. Contact us today at (210) 257-9788 or (210) 729-6099 to learn more.