Charleston affordable housingThere’s no place like home. And nearly 70% of Americans know it because they own one.

Being a homeowner has many perks. Your house is an investment that, over time, appreciates in value. The money you spend on your mortgage payments is tax deductible, and when a home builds equity, a homeowner can borrow against that equity and the payments are also tax deductible.

No doubt, it is more difficult today to buy a home than it was years ago. Lenders are requiring anywhere from 10-20% of the cost of the house as a down payment. Saving for a down payment will take some sacrifices and determination, but it will be well worth it in the end.

A few suggestions on how to save for a home:

1.) What can you afford?

Lenders suggest that the monthly mortgage plus taxes and insurance should not be more than 30% of your monthly income. Even if you think you can afford more, remember, you will be paying for all house repairs. A leaking roof or broken refrigerator isn’t your landlord’s problem anymore. It’s yours. You need to have enough money put aside in case these things happen.

2.) Limit spending and save.

Look at where your money is going and start making some changes. Eating out less often, fewer shopping trips, using coupons and cutting cable are just a few things that you can do to save money. Even changing the deductible on your health care plan could save substantial money.

3.) Set a monthly goal.

A goal of $30,000 might feel overwhelming. Instead, shoot for $500 a month. This gives you a feeling of success and the inspiration to stay on track.

4.) Set up a separate savings account.

Have money directly deposited in a savings account every pay period. If you never see that money, it’s less likely you will miss it. Some banks and credit unions offer accounts with incentives for first time home buyers.

5.) Your 401K and IRA can help.

If you have retirement money in a 401K, borrowing money to pay the down payment is an option. You have to pay it back, and if you leave your job before that is done, there will be penalties. Your IRA is another option. If you’re a first time buyer or if you haven’t owned a principal residence in the last two years, you can use up to $10,000 in IRA funds as payment without penalties of an early withdrawal.

6.)  Look for help.

The Federal Housing Authority has programs that help first-time home buyers with a low income. SC Community Loan Fund also offers a homebuyer assistance program. Qualified buyers should contact an eligible sponsor that would then submit an application on behalf of the buyer. On a first-come, first-ready basis, CLF can provide a non-amortizing subordinate mortgage loan to lower the purchase price of the home.

For more information on how CLF may be able to help you become a first-time homeowner, please contact us at 843-973-7285 or