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10 Tips to Help Renters Save Money to Buy a Home

10 Tips to Help Renters Save Money to Buy a Home

In many real estate markets across the nation, buying a home makes more financial sense than renting one. However, if you’re currently renting an apartment or home, you may have some major concerns about taking the plunge into home ownership. One of those concerns is likely the financial aspects of being a homeowner.

Take the down payment for instance. Many lenders require buyers to put down anywhere between 3%–20% of a home’s purchase price. When you couple that cost with inspector fees, closing costs and the prices associated with furnishing a new home, it is no wonder that many renters may want to shy away from even the thought of buying a home.

But, if you’re a renter who is ready to enter the realms of homeownership, there is help. Here are 10 easy ways to save money for a house while you’re renting:

1. Take care of your credit. When it comes to managing your credit when you’re ready to buy a home, you cannot do just the minimum. If you want to lower your debt-to-income ratio, which can result in a lower annual percentage rate, pay off your credit card bills. Signing up for autopay is a great way to make sure you never miss a payment.

 

2. Pay yourself each month (or every two weeks). It is easy to save your money each pay period when you do not even see it entering your checking account! You can set yourself up for savings success by automatically depositing some of your pay check. After all, what you can’t see, you can’t spend!

 

3. Split the monthly bills. If you are shouldering your monthly expenses by yourself and you want to buy a home, get a roommate! Having a roommate who can help you pay for your expenses each month will allow you to save more money in a shorter amount of time. That is, as long as you don’t mind sharing your space for a while!

 

4. Stop paying for what you don’t watch. Do you ever feel like your cable bill is getting out of control? Do you watch more on Netflix than any of those cable stations you’re paying for each month? Drop your cable package to see instant savings on the screens you barely watch.

 

5. Curb your cravings. Whether it is coffee, happy hour or a good lunch out of the office, spending money at some of your favorite spots can really add up. Take your usual office outings and cut them in half. You may be amazed at how much you can save!

 

6. Pick up a second job. You don’t have to work another 9-5 after your regular 9-5 completes. Instead, pick up a hobby job. Walk neighborhood dogs or house-sit for neighbors that are going out of town. Why not get paid to do things you’ll actually enjoy?

 

7. Sell things you don’t use. Take a look in your closets to find items you no longer use. Instead of letting them take up space, sell them! You’ll have more money to put towards a forever home and less items clogging up your closets.

 

8. Start budgeting. Maybe you use a pen and paper. Maybe you prefer an app. Whatever you choose, use something to manage your money! You may think you have a good idea of what you earn and what you’re spending, but until you see it on paper or your phone, it won’t register. Save money by tracking your spending.

 

9. Redeem your credit card rewards. If you’re using your credit cards, you might as well try to take advantage of that swiping. Sign up for the monthly rewards you can accrue by using credit cards. When you start earning free gift cards, you will feel a little better about splurging on yourself when you’re trying to save for a home.

 

10. Don’t take a trip on your tax refund. Instead of planning a spring break trip when you get your tax refund, put that money into a savings account. Trimming your lifestyle expenses will significantly increase your savings.

With these 10 tips and tricks, saving money to buy a home while you’re renting can be easy. Start today and you may be surprised at how much you can save in no time at all!

 

This post is sponsored by PA Preferred Mortgage:

Pennsylvania Preferred Mortgage is a full-service mortgage banker and is a member of the Prosperity Home Mortgage, LLC family. Specializing in residential and refinance loans, Pennsylvania Preferred Mortgage offers a wide range of mortgage products, including fixed and adjustable rate mortgages, jumbo loans, Federal Housing Administration (FHA) and Veterans Affairs (VA) loans, and renovation financing. Learn more at www.papreferredmortgage.com.