Today on Dear Claire, we discussing saving your down payment.
How do I save for my first home? This can be a daunting task because you’re probably younger, possibly have student loans, a new career, etc., and trying to save 3% or 5% of the purchase price is a lot of money. It’s hard to come up with that, especially the first time you purchase, because when you have something to sell, obviously the money is coming out of the house that you’re selling. So that makes it a lot easier the second time around.
First off, I want to talk to you about two programs that are specific to Oregon. They are the Oregon Bond and also he Portland Housing Center, and there are a few other programs that ask for literally zero money down. Depending on qualifications you have to come up with closing costs which would potentially be a couple thousand dollars, but that’s more doable than 20% of the overall selling price. Both programs can be super complicated and we have lenders that specifically work with those programs. If that’s something you’re interested in, just let me know. I’m happy to help.
As far as savings go, all the little things add up. That coffee that you get at Starbucks once a week, that’s $3-5. And, you know, when I’m starving, and I didn’t pack a lunch, I swing by the Arby’s and spend $9. When I was starting to save, those little costs were a real big eye opener.
The most important thing you can do, which is often filled with a lot of shame, is just look at your finances. It can be like going to the doctor – “I don’t want to know so I don’t look at it”. If you don’t look at it, you have no idea where you’re spending your money. I was super embarrassed about really looking at my finances, and so I used Mint to download all of my credit cards and my debit, etc. I looked at all of it and I ended up finding a reoccurring expense that the credit card placed on my card. It was an $8 a month charge, which no big deal, right? But it had been going on for years without me knowing about it. I ended up getting like thousands of dollars back from the credit card company because I took them to task, as I had never authorized the fees. That was the turning point where I decided I had to take responsibility over my finances. And maybe I want to spend all my money on Starbucks, maybe I don’t want to buy a house, but at least then I know what I’m spending my money on.
We have a bunch more tips on our blog post as to how you can save money for next bid purchase. The big take-aways are that there are programs out there to assist do you don’t need to come up with a large down payment. Also start with saving something small. I know it seems like a huge task, but just start small. Just look at what you’ve got going on and really take stock and see what can you trade off and what can you save.
Take care and have a great day.