FSB Blog

Best Ways to Start a Home Budget
August 9, 2023

Do you have champagne tastes on a Busch Light budget? Don’t despair, there are ways to give your buying budget a boost. 

Here are nine tips to help you get started on your home buying journey and get you to closing day:

  1. Reduce your debt: Not groundbreaking, we get it, but when it comes to securing a mortgage, we’re going to look at your debt-to-income ratio. Can you tighten your shoestrings temporarily to pay down some of your debt? What about a second job? Can you handle a roommate for a short period of time until you’re ready to buy?
  2. Hold off on any big purchases: This comes back to your debt-to-income ratio. Unless you want to be living in that shiny new ride, you may want to hold off and stretch the life of your current car.
  3. Give your credit report a once-over: You could have skeletons in your closet you weren’t even aware of that could rear their ugly heads during your pre-approval. To get your free credit report visit www.annualcreditreport.com
  4. Clean up your credit: It could be worth doing a little credit CPR, so you’re able to come to the table with a better score. This could equate to lower interest rates, saving you thousands in the long run. Start with our 3 quick tips to raising your score.
  5. Forget a rainy day, save for that down payment: More cash in hand means more financing options and a potentially lower monthly payment. Cha-ching. Ideally, that’s 20% of the home price, but even 3% could get you into the home of your dreams.
  6. Consider the diamond in the rough: You may be able to find a future dream home waiting for the right buyer with a vision. Consider taking on minor cosmetic modifications to save money and give it your personal touch. Or look at neighborhoods that haven’t yet arrived and may just be the next great thing.
  7. Find a motivated seller: There can be a lot of reasons a seller needs to move quickly and will be more motivated at the negotiating table including job relocation, downsizing and they themselves closing on a new home soon. Learn to play the game.
  8. Consider a multi-family home: Have you considered letting someone else pay your mortgage? While you live in one portion of the home, you could rent out another giving you funds towards your monthly payments and some potential additional tax benefits.
  9. Last but not least — just because you can doesn’t mean you should: You may qualify for a certain loan amount, but it doesn’t mean you should purchase right up to that amount. If buying at the top of your budget means you’re going to be eating Ramen and living off whatever entertainment you can check out from the library (yes, they do still exist) then maybe you should consider dialing it back a little. Your new home should be your sanctuary, not your prison.

Whenever you are ready to take the leap into homeownership our Home Loan Experts are here to help! Never any sales pitches, or uncomfortable meetings, just real answers to your questions.

This blog is intended to be an informational resource for readers. The views expressed on this blog are those of the bloggers, and not necessarily those of FSB. This blog does not provide legal, financial, accounting or tax advice. The content on this blog is "as is" and carries no warranties. FSB does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog.