Does the thought of paying a mortgage scare you a little bit? Many times renters can certainly afford payments, but they’re afraid to take the plunge. Check out how Jim Wang of Credit.com figured out if he was ready and saved for a down payment in the process:
“Every month, I paid my $600 for rent and set aside $900 in savings. As you’d expect, I didn’t just transfer money from one account to the other, because who has $900 sitting around? If I did, I wouldn’t need to play house!
I had to make adjustments. I contacted my human resources representative to reduce my 401K contributions so I’d have more in my paycheck. I had to adjust my other savings goals as well because I wouldn’t be saving as aggressively.
I also started going out to dinner and bars less often. Instead of going out for drinks a few times a week, I limited myself to two nights, on the weekends.
Making those trade-offs became easier — and easier to explain to friends without having to deal with grumbling, because I was making a clear choice. I was cutting some social time because I wanted to buy a house. I wasn’t saving money for the sake of it. I had a very good reason: to buy a house.
The housing search took about 18 months, and I played house for only 12 of them, so I had an extra $10,000 or so saved up in my mortgage account. I took that money and put it toward the down payment.
The house ended up having a mortgage that was a little less than $1,500, and after living with the mortgage payment for a year and a half, I had no trouble adjusting to it.
If you’re thinking about buying a home or making a similar large purchase, consider playing house first.”
You can read the entire article here. We love working with first time home buyers! Let us help you every step of the way and bust out of that renting cycle.