How to Finance Your First Home Purchase Without Going Into Debt
Tuesday, April 21, 2020, 6:00 PM | Leave Comment
Buying your first home is a major milestone. What would be an even bigger milestone, though, is if you could pay for your first home without taking on any debt.
As impossible as this goal may seem, the good news is that with the right planning, this goal is achievable.
To help you understand how this can be done, here is a basic guide on how to finance your first home purchase without going into debt.
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Take on Another Job
While working two jobs isn’t feasible for everyone, an extra paycheck can go a long way toward financing a new home debt-free. This is one case where the short-term pain of limited free time is outweighed by the long-term gain of purchasing your home with cash. The key is to avoid seeing your extra income as an excuse to spend more, as this will only keep you in this less-than-ideal situation for longer than necessary.
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Consider What You Need
The price of your first home will ultimately determine how long you need to save. Therefore, if you can find a less-expensive home, you won’t have to save as long as you would if you went for something top-of-the-line. Therefore, it’s a good idea to consider what you truly need when it comes to single family homes so that you don’t overbuy, causing you to have to go into debt.
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Invest in Stocks
While stock market gains are unlikely to finance an entire home purchase, wise investing can help you reach your goal of debt-free homeownership sooner. By closely tracking stock prices, you can time your buying to coincide with periods of lower pricing, allowing you to sell your stocks at a profit. Just be sure to use a broker that doesn’t charge fees, as these fees will quickly eat into your earnings.
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Limit Your Expenses
The best way to save money for any goal is to limit your expenses as much as possible. This is just as true for a big purchase as it is for a small one. Therefore, make a budget for your spending and then stick to that budget as closely as you can. While it might be painful not to be able to eat out or go to the movies as much as you’d like, removing the burden of debt will make the pain more than worth it.
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Small Steps
Though the price tag of most homes seems like a big number, the way you achieve that number is through small steps. Unless you’re independently wealthy, you won’t wake up tomorrow with the ability to buy a home with no debt. It’s important, therefore, in the midst of your small savings victories, to not become discouraged but to keep the big picture in mind at all times.
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Brooke Chaplan is a freelance writer and blogger. She lives and works out of her home in Los Lunas, New Mexico. She loves the outdoors and spends most of her time hiking, biking, and gardening. For more information, contact Brooke via Facebook at facebook.com/brooke.chaplan or Twitter @BrookeChaplan
