BUYER'S RESOURCE »
TK Homes loves working with 1st Time Home Buyers. In fact, it was buying his 1st home that really got Trevor Kohlhepp excited about pursuing his career as a licensed REALTOR®. Because of this, TK Homes truly understands the excitement, fear, challenges, the ups and downs, and all the other emotions that come with buying your first home. We’ve also learned that this buying journey usually starts well before you meet with us, we want to change that!
We find that many 1st time buyers wait until they have the funds for their down payment readily available. This can be a mistake, our experience can help you save money quicker or help you get into your first home without needing as much down. It’s a common myth that you need 20% down to purchase a home. With Denver’s median home price hovering right around $400,000 that can be a daunting task for anyone. So the first set of good news is that you can purchase a home with less than 20% down. In fact MUCH less.
There are some loan programs available that would allow you to purchase a home with as little as $1000. However, in most cases here at TK Homes we would not recommend you purchase a home if you only have $1000 in the bank. Most other programs have options starting at just 3.5% or 5% down. Now that is much more achievable. Also, keep in mind that it is the median home price is right around $400,000, this means there are just as many homes selling BELOW that figure as above. So, now that we’ve removed the idea that you need to have $80,000 in the bank to purchase a home in Colorado, lets talk about some ways to help you save money so you can get to that 3.5% or 5% figure as quickly as possible. The first tip is make it as automatic as possible. The fact is that if you don’t see the money in your checking account, you’re less likely to spend it. Check with your bank and see if they have the option to automatically transfer a set amount to your savings account each month or even better, immediately after each paycheck is deposited. If you don’t see it, you’re less likely to miss it. The next tip would be to go through your personal items. Is there anything you’re not needing anymore that you can throw on Craigslist? Anything you’re not using anymore sell. Then take that money and add it to your automatically growing savings account. You’d be surprised how much money you have laying around in unneeded items throughout the house. Tired of Craigslist? We recommend the app Offerup, from our experience items sell for more and quicker on this platform.
This next tip is a bit drastic, but if you’re serious about buying your 1st house it could be just what you need. Often times you’re not able to save money quickly because your monthly expenses are too high, leaving nothing for savings. If this seems true for you, it might be time to sell your vehicle, pay off high interest credit cards, and find a different place to rent to reduce your cost of living. This may sound extreme, but remember it’s only for a short period of time.
The last tip would be to make sure you’re living on a budget every month. If you don’t budget, you don’t know where you money is going and you don’t know how much you can save. Once you complete your budget ask yourself if there is anything you can cut out to help increase cashflow and the amount you put into savings. Again, living tight isn’t going to be permanent, it’ll just be until you have the down payment saved for your first home.
So there you have it, some great tips to help you start saving money immediately to put towards your first home! Have more questions about purchasing your first home, make sure you download our completely free guide on buying your first home, it has even more information on financing, inspecting and everything else you need to know. If you have questions about how to create a budget, make sure you check back with us in two weeks when we’ll be sharing a step by step instruction on how to budget and provide you with the ACTUAL budget Trevor used to save for his first home and still uses every single month to this day. You won’t want to miss it! And finally, tell us how YOU save money by following the Continue the Conversation link below!
Bonus TIPs! Did you know that your down payment can be borrowed from your 401k and that your down payment is allowed to be gift funds from a family member? It’s true, we work with buyers all the time purchasing homes with borrowed funds from their 401k and/or gift funds from parents or grandparents.