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How to Save for a House While Renting

You’re sick and tired of paying your landlord’s mortgage. It’s why you recently decided to create a down payment fund. There’s only one problem — you’re still writing rent checks and don’t know how much extra money you can put away.

Many Coloradans face this same challenge in 2020. While they understand the importance of saving in order to buy a house, they don’t know how to make it happen. 

We want to help you turn your homeownership dream into reality, even if you’re currently on the hook for rent. Check out these tips from our award-winning real estate agents.

Tighten up the budget

It’s impossible to stash money aside without making a few sacrifices in your daily life. So what expenses should you cut out from your budget first? Well, you’ll likely save $100 or more simply by canceling subscription services and gym memberships.  

From there, look at your regular spending habits. You might be surprised at the potential savings when you switch to generic brands and begin using coupons. We also recommend that hopeful buyers keep their non-essential purchases to a minimum during this time.

Pay off debt

You aren’t alone if you’re struggling with high-interest debt. Whether it’s credit cards, student loans, or personal loans, these payments take a bite out of your paycheck. But the reality is that you can get ahead of such debt and free up additional room in your budget.

Debt payoff and saving go hand in hand. The less debt you have, the more you’re able to save. Just be sure to find a repayment method that works best for you.

Automate your savings

At this point, you’re starting to see the fruits of your labor! But the tricky part is actually putting this green toward your down payment fund and not a luxury item. Play it safe and set up an automatic transfer with your bank — that way you won’t be tempted to spend. 

Land a second job

You can only generate a certain amount of income by reworking your budget and paying off debt. In fact, you may have to find a second job in order to achieve your ultimate goal of homeownership. And that’s okay! Picking up another gig allows you to save for a house faster since every dollar you make will be earmarked for a down payment.

Sell unnecessary stuff

This is actually fairly easy compared to the other ideas we’ve mentioned. If you’ve been wondering when you should part ways with that baseball card collection, now’s the time. Or perhaps someone would be interested in purchasing your old (but still functional) phone.

We are, by no means, advising you to sell the junk in your apartment. But if you can receive compensation for things you no longer use, why not do it? 

Get a roommate

Say you could get back an extra $500 a month by splitting the rent. Do that for six months and you have a whopping $3,000 to put toward your house. Granted, you’ll need to share the space and compromise on occasion. But it’s worth it if you ask us. 

Look into down payment assistance

Still can’t build up your savings account even after putting the above tips into practice? Thankfully, there are programs in place to help you buy your first home. This includes home grants, forgivable loans, and non-forgivable loans, among other options.

Our suggestion is to research down payment assistance programs early in the process. Borrowers often qualify based on location, occupation, or special household circumstances. As always, reach out to a lender with questions.     

Colorado first-time home buyer programs

We have an entire article dedicated to Colorado mortgage assistance. That said, we thought it would be good to bring up two programs designed for first-time buyers in the state. They are the Colorado Housing and Finance Authority (CHFA) and the Chenoa Fund.

In short, CHFA borrowers benefit from low down payments and support with closing costs. The Chenoa Fund, on the other hand, works with a fixed-rate FHA first mortgage. Those who qualify for this program may get into a new home for no money down.

Contact our trusted real estate agents

The right real estate agent makes all the difference in the world. But with the number of agents in Colorado, how do you know which one to choose for your situation? 

You can’t go wrong with the team at American Home Agents. We have decades of industry experience, and we understand the market inside and out. Plus, we’re happy to refer you to a local lender for your financing needs.

Say goodbye to being a renter! Call American Home Agents at (303) 695-5900.

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