Saving for a house

Amy - posted on 10/20/2008 ( 13 moms have responded )

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My husband and I are trying to save for our first house. I've recently left my former career of being a Preschool Teacher and have been a stay at home mom to our almost 3 year old daughter. Money has been tight, but we've been getting by. Does anyone have any suggestions on saving money and buying your first house?? Thanks!

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Natalie - posted on 10/21/2008

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Hi there,

I am in the mortgage business, so from a qualifying stance, I can certainly help you.



First, if you can, pay off or pay down credit cards, do that but DON'T close these accounts unless they are store accounts. We look at credit and debt ratio to qualify you, so pay bills on time and set up auto payments so you are never late. Add up all your monthly payments and divide this by the income, that's your ratio, shoot for less than 45% but remember, all that counts is true lending credit, autos, credit cards, student loans. Not the grocery bill or electic bill, none of that.



Use all the advice for shopping sales and such, but often people overlook the other side. When you buy a home, you'll need to show where your down payment comes from, so this account should be funded at least 3 months prior to closing. If you choose an FHA loan, you only need 4% of the purchase price to put down. Plus, you may have a non-occupant co-mortgagor, such as mom or dad if they agree and if their credit is good. You'll also need reserves, so count on 3-6 months of full PITI payment. This should go in the same account. Any savings or retirement account can help you meet these limits as well.



Tell hubby to stay in his job, don't make any big purchases just prior, use laser focused accounting to keep yourself on track. Rates are good right now and if you have a high credit score, you'll slam dunk your loan. Housing prices are great as well, so maybe look for a foreclosure???



Keep your paperwork organized, W-2's, pay stubs, and so on. And call your auto insurer for a quote on your new home, but do shop around.



There is a lot of information out there, try mortgage-x.com for basics. Of course you can always ask questions of me as well. Good luck.

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I highly recommend going to hotcouponworld.com They break down the stores and then match the coupons with the sales, you can get links to print coupons and they also have a section for trading coupons with other members.

[deleted account]

The way my husband and I accomplished this was:



$40.00 a week allowance between the two of us, this would be spent on eating out, extra's that weren't needed, stopping at the conveinant store for drinks, date nights ect.



Cut your groceries bill in half, stock pile what you can when it is on sale and stick to your budget. COUPONS COUPONS COUPONS. I save roughly 80% of my grocery bill using coupons, we put 50% of the savings in a separate account and thank the manufacturers for the other 30%.

Cynthia - posted on 11/06/2008

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When we bought our house about 6 years ago, we were able to take out 10K from our IRA. You can take out money from there penaltiy free if it is for certain things. The down side is that you have to pay income tax on it. But that extra 10K helped us put enough of a down payment on the house that we didn't have to pay PMI insurance which could be as high as 200 a month.



We also put a little extra each month towards the mortgage. Even if it is just $20. It will come off the principle and could take away a whole year or more off the life of the mortgage.



Good luck.

Sara - posted on 10/23/2008

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you can sign up for couons with each individual company - like huggies.com [definately go there if you have a diaper child]



or coupons.com - they are mailed weekly! its just certain sponsors but something is better than nothing.



I don't buy a sunday paper either, I just take the coupons out of the paper from my family members who don't use coupons!

Amanda - posted on 10/23/2008

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Is there any good website to print off coupons, or is it just the paper, we usually dont buy the paper here, so wondering where i can go to print coupons off.

Sara - posted on 10/23/2008

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Check out freecycle groups in your neighborhood on yahoo.com [groups section]

There are often lots of freebies from kids clothes to household furniture that will help save you some dough!

Sara - posted on 10/23/2008

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We also contacted our energy company to get into a program that automatically shuts off your air/heat when its peak usage time and when prices are most expensive. worked great last summer.

Sara - posted on 10/23/2008

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Be sure to try to clear all of your debts as much as possible before applying for your home mortgage. Focus on clearing credit cards first.



I've saved in groceries by going to the dollar store [they do accept coupons!] for things like toothpast and deoderant which then come to be like $.50 each after your coupons. Watch your sunday ads and the sales. We don't buy anything not on sale anymore. It does take some imagination with dinner but its well worth it!

Victoria - posted on 10/21/2008

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HI, my husband and I have recently just purchased a house so I know the struggles. We have two children and have been scraping by too. What I would suggest is to get the basics right. First make sure you are getting all the benefits you are entitled to. Me and my hubby both live in the UK and are both eligible for tax credits which contributes about £500 a month! Obviously we get child benenfit too which is another £100 a month.



Next I would say consider your grocery shopping. If you can buy similar items cheaper then do so, drop one level in price as it were, instead of buying heinz beans, I would buy Tesco own brand beans. Its amazing how much you can save. And don't be afraid to shop around. I shop at about 3 different stores to get the best prices. Also if your stores have any loyalty schemes join them. I do my shopping as normal and once every three months I am sent vouchers for money off. This is simply because every pound I have spent in those three months equates to a point, and every point is given back to me in a penny! Not much but it helps.



Also consider other bills. With many bills you are charged more because you pay monthly, if you can pay annually you my be able to save a few hundred. Me and hubby saved about £500 last year by paying tv license, home insurance and car tax once a year instead of each month.



When it comes to clothing for your kids beg borrow and steal all you can from friends and family. I hardly bought anything for my second child, I know they're hand me downs and not as nice but they're still in good condition and its not cost you anything! For yourself repair as much as you can, and shop at cheaper places. We have Asda that sells such cheap clothes and they're still nice.



Its hard, but if you budget well and keep to a minimum it all helps. Similarly when you do get a place of you own, stick to the minimum there at first too. When we moved we had no phone except our mobiles, no cable tv and no internet. In terms of buying the house though, when you find the right one, don't pay full price! No one pays full price, knock of at least 10% of what they're asking and more if there's lots of work to do. Thats how it works here anyway! Similarly though, if you can afford a fixer upper you will often get them for a really good price as no one wants to do the work. You can get what will be a fabulous house, at a much lower price. Thats what we did, we got ours for about £30,000 less than its worth now because we got one that needed work. If you're up for painting and hard work then it's great!



I hope all this helps, sorry it's been such a long reply!

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