How To Save For Your First Home: A Step-By-Step Guide

Embarking on the journey to homeownership is both exciting and, let’s be honest, a bit overwhelming—especially when it comes to saving up for that down payment. Knowing where to start and setting realistic savings goals can help take some of the mystery (and stress) out of the process. Here’s a straightforward plan to get you on the right path to owning your first home!

1. Set a Clear Savings Target

Before diving in, it’s crucial to know what you’re aiming for. A good rule of thumb is to save about 20% of the home’s price for a down payment, although some loan options allow for lower percentages. Don’t forget to budget for closing costs, which typically run between 3-6% of the home's price.

Establishing a target amount helps you stay focused and sets the foundation for a successful savings strategy.

2. Evaluate Your Current Spending and Make Adjustments

Take a close look at your spending habits and identify areas where you can cut back. This doesn’t mean giving up all your comforts—think about small adjustments like cooking at home more often or reviewing subscription services you no longer use. Even modest lifestyle changes can free up significant funds to add to your down payment fund.

3. Set Up a Dedicated Savings Account

By creating a separate account for your house savings, you’re less likely to dip into it for non-essential expenses. You could even set up automatic transfers to this account each payday. It’s a simple way to build savings consistently without having to think about it.

4. Explore Down Payment Assistance Programs

First-time homebuyers often qualify for local, state, or federal programs that help with down payment assistance. These programs can sometimes offer grants or low-interest loans to support your goal. It’s worth researching options in Tarrant County and the surrounding areas to see if any match your needs.

5. Consider a Side Hustle to Boost Savings

A side gig, even if it’s temporary, can be a game-changer for your savings. Whether it’s freelancing, tutoring, or working a few extra hours on the weekends, an additional income stream can help accelerate your progress toward your down payment goal.

6. Pay Down Existing Debts

Reducing your current debt load can improve your debt-to-income ratio, making you more appealing to lenders. Not only will this help you qualify for a mortgage, but it may also enable you to secure a lower interest rate, which can save you money in the long term.

7. Start with a Homebuyer Assessment

Before diving headfirst into saving, take a moment to understand your readiness. Our First-Time Homebuyer Assessment is designed to help you evaluate whether now is the right time to transition from renting to buying. It’s a great way to assess your financial situation and get a clearer picture of the steps you need to take.

Making Your Dream of Homeownership a Reality

Saving for a house may seem daunting, but with clear goals, smart spending, and perhaps a little extra hustle, you can build the foundation needed to purchase your first home. And remember, every small step you take now brings you closer to achieving the dream of homeownership.

Ready to take the next step? Take our First-Time Homebuyer Assessment to see how close you are to reaching your goal. Whether you're almost there or just starting out, we’re here to guide you every step of the way.