a minute. Did I just say the same thing twice? What I’m saying is simple. You’ve just got to stick to it. Always remember that no one else is going to do it for you. It’s up to you. Just remind yourself of that anytime you are feeling discouraged or down about what you are doing. You’ve got to keep going everyday and believe that you can reach your goals because you can.
Look around you. How many people own homes? A whole lot of people own homes. How do you think they got there? It wasn’t easy for everybody and not everybody grew up with money or inherited a house. Most people worked hard for it. They planned, they saved, they sacrificed, they put their plan into action, and one day they were able to own their own home.
You just stick to your plans and you will reach your goals. Remember, it’s up to you and you can and will do it. Tell yourself this… “I don’t quit. I don’t give up. I don’t know how.” Over and over and over again until you believe it. I didn’t just make that up for this book. A good friend of mine gave me the same advice and I used it. I said that to myself over and over again, especially when the going got extra tough. I know it can work for you too!
How much money should you save?
You should save as much money as you need and more. I know that’s not what you wanted to hear but it’s true. After some research, you will discover approximately how much money you will need for a down payment on a home. After you know that, add in some extra money for closing costs. It really depends on the type of loan you are going to use, which I will talk about in more detail in Chapter 3 on Financing.
For the sake of an example, let’s say that you are going to use a Conventional Mortgage to purchase a $100,000 property. You will probably need about 20% of the purchase price as a down payment, so $20,000. You will also need approximately 3.5% for closing costs, so $3,500. So you are looking at about $23,500.
I want to tell you like it is because if I’m not upfront and honest with you, I’m not really helping you. Right? If you don’t have anywhere near that kind of money right now, I don’t want you close this eBook and walk away because there is good news! A Conventional Mortgage is by no means the only way to go. Plenty of other options exist and you can talk to your Lender, when you choose one, about the other loan programs available to you. Don’t worry. Read on!
Also, I’m quite sure that you will need to buy, fix, or even replace things after you move in. The Home Inspection, which I talk about in Chapter 7, will prepare you a little bit more for any additional costs but just know you will need some extra money.
Believe me when I say that something will come up. It just always happens. It’s part of home ownership. Don’t get me wrong, home ownership is an amazing thing but there are some costs associated with it. If you prepare for them though, you will be very happy that you did.
So first figure out how much you want to pay for your house, figure out how much of a down payment you’ll need, then add on, approximately, 3.5% for closing costs, then an extra 2 – 3% for any surprises. Then save save save! Like I said, Chapter 3 on Finances will help you a lot with this. Just remember that when you do the work up front and prepare, you’ll be happy and less-stressed in the long run!
How do you repair your credit?
Credit Repair is a funny thing. It really depends on what is wrong with your credit. Do you have debt you need to pay down that you can afford, are you behind on your bills or are you behind on loan payments?
If you’ve got a lot of credit card debt that needs to be paid off, just start putting a little extra money towards it each month. I know we don’t all have extra money to put towards credit card debt. If that’s the case, stop using the credit cards first. It might seem rough. Pick up the goals you wrote down and look at them again. It will help a lot!
See if you can spare any extra money each month. Maybe shop a little smarter at the grocery store, or skip buying that new pair of $100 jeans, or that new pair of $75 shoes. I’m sure you can find a way to save money if you want to bad enough. It’s all up to you.
If your debt gets bad enough and it’s just out of control, a Debt Consolidation company is always an option. You will hear mixed reviews on them. I had a good experience with one. I liked it because it was a non-profit company. They helped me contact my creditors, cut out late fees and interest, and consolidated my debt into one monthly payment. That allowed me to make one payment monthly to them and not worry about paying multiple creditors each month. They took care of paying my creditors for me. Eventually, I paid off all my credit card debt that way.
Some lenders will have restrictions on lending money to people that have used debt consolidation companies. They mostly want you to be out of the program for a given amount of time first. After that, you may be able to get approved for a loan. Don’t let this bother you. Like I said, I used one of these companies. I also got a home loan from a very reputable lender after my debt was paid off.
SIDE NOTE: If I was able to do it, and I was, then I know that you will be able to do it too!
Why shouldn’t you take on any new debt?
You shouldn’t acquire any new debt now that you’ve decided to move forward with your goal of owning your first home. Why is this? It’s because new debt is exactly that, new debt. Why do you want to take on more financial responsibility when you are just now trying to put together a plan to get yourself in better financial shape? Does that make sense?
Think about it. If you are trying to pay off $10,000 in credit card debt in order to be able to purchase a new home, why would you go to a local electronics store and open a charge card with a $2000 limit in order to get that new 46 inch flat screen TV for the living room in your apartment. Trust me, it’s not worth it. I know from experience.
Stay focused on your goals and your plan. Resist the urge to take on new debt even if it’s for something that you really want. You have to ask yourself, “Do I really need this?” If your answer is “Well no but I really want it.” then DON’T BUY IT. It’s pretty simple. Once you have decided to purchase your first home, do not take on any new debt until after you have closed on your home. You’ve got to be in charge of yourself. No one is going to do this for you. It’s up to you.
I would like to add to this by saying that sometimes things happen in life that we have no control over like illness, accident, loss of employment, injury, etc. I wish you all the best and I hope nothing like that happens to you or anyone that you know or love but if it does you need to take care of that first. I am strong believer in putting family and loved ones first.
I am also a strong believer in sticking to your plan and working toward your goals but remember this isn’t all about money. It’s about balancing, getting your whole life in order, and moving forward.
If you or your family or your loved ones are in trouble, your life is not in order. Right? You’re plan will still be there waiting for you to finish it. It’s not going anywhere. I wanted to share that thought with you.
How are you going to track your progress?
Tracking your progress is as simple as watching the money in your bank account grow. I mean, if your goal is to save $6,000 in 12 months time and you are really sacrificing and putting $500 per month into your savings account, just do the math. $500 X 12 months equals $6000. You’re right on track.
If you can’t put that much money away each month, don’t worry. Most of us can’t do that. Whatever your goal is you can apply the same formula to see where you stand. You can also use a money management program on your computer that allows you to keep track of your money and set goals for financial growth. Some of these programs