Buying a home is one of the most significant milestones for most Americans, and it is usually the most significant purchase many of us make. The main obstacle that hinders people from fulfilling this milestone is the amount of money that is required for purchasing a home. No matter what mortgage plan you choose, you’ll have to put some money as a down payment. Moreover, there are several other things you need to save for. These things include closing costs, inspection, appraisal, and in some cases repair costs.

This is the money you’ll pay to close the deal when buying a house. It can be borrowed from the bank in the form of a home loan or might come from your savings over the years. One thing to note is that some portion of your down payment should come from you directly. It usually acts as insurance to your lender, proof of your commitment. Making a sizeable down payment is advantageous to you as the buyer because you can select a shorter mortgage term, which will ultimately reduce your debt.

No matter how hard you try, the amount of money you can save in the coming years strictly depends upon your earnings. Therefore, you must have an idea of how much you can spend while buying a home.

Most people are utilizing every penny they earn towards running their day-to-day expenses. A time comes when they no longer have additional income left to save. This is where you need to start working on another income source. Now it doesn’t have to be something huge. You can start working on your passion part-time and try to make a decent amount from it. Luckily, the internet is full of options that can help you save additional money in no time. After all, this year has been about the gig economy!

Debt is what holds most people back from becoming homeowners. It makes saving difficult as a chunk of your earning goes towards repayments. At the same time, the debt load also makes it tough to qualify for a mortgage. If you have debt, do everything in your power to control it – even if it means using cash at most places.

The US government and the state of California offer different programs that help first-time homebuyers. For instance, the Federal Housing Administration (FHA) loan allows you to put only 3.5% down. But to avail of this, you need to have a credit score of 580 or higher and a debt-to-income ratio that is below 43%. For buyers with a credit ratio between 500-579, you have to put down 10%.