How to Save for Your First House

It's a dream of many young adults to buy a first home. But there's an unfortunate reality: Even buying a "starter home" with today's lofty prices can mean saving tens of thousands of dollars for a down payment. How do you pull it off? The key, obviously, is to save like crazy. Beyond that, here are several suggestions that may make the path to home ownership a bit easier.

1. Aim for 20 percent down – You will also need extra money set aside on top of the down payment for closing costs such as title insurance and mortgage fees, which can reach up to $5,000.
2. Keep it separate - Set up a separate account for your down-payment funds, so the money does not get intermingled with other savings and so you can keep track of how much you save.
3. Clean up your finances - Your credit history will determine the loan terms and mortgage rates you qualify for. You could be offered a smaller loan or charged a higher rate if a lender is concerned you might not be able to repay.
4. Weigh mortgage tradeoffs - A general rule of thumb is that your monthly mortgage payment shouldn't exceed 28 percent of your household's gross monthly income.

To find out the price of local starter homes, so you can estimate what you'll need to save up, you can check out home listings on http://www.noltingrealestate.com/ or call us at 636-391-9997.