Some people say couples should have a home first before having a child. But affording a house, in the first place, doesn’t come easy for all couples. A lot have raised children in rentals, and had no major problems with it, anyway. But if we’re talking about multiple kids, then living in a rented home is more or less unideal. You’ll quickly outgrow the place, and privacy might be an issue.
If your dream for your little family is a nice and safe home that you can all grow up in, then you should definitely start growing your savings now. By making smart financial decisions and being responsible with your payments, you can quality for the best home loan plan, and hold the keys to the perfect family home sooner than you think.
Here are ways to reach the money milestones that’ll help you buy your ideal home while raising your kids.
1. Have a Stable Career
When you’re already a parent, changing jobs every so often is no longer liberty you can afford. You have to pursue a career that you can maintain for the long term. It will be the stable foundation that’ll support your family.
Strive to earn a salary that can cover your child or children’s needs and more. If the average cost of raising kids until their 17th year is $233,610, then hustle hard to make at least 16% of that. That should be enough to cover childcare expenses and your other needs.
2. Get a Mortgage Preapproval
A mortgage preapproval is a process you can undergo before applying for an actual mortgage. If you accomplish step one above, then you have a high chance of being preapproved.
This is highly helpful in determining the price of the home you can afford. That’s because in a preapproval, your provider tentatively qualifies you for a mortgage of a certain amount, giving you a glimpse of the budget you need to buy a home. It proves to sellers that you are a serious contender among all the pool of buyers competing for a good property.
Once you’re ready to apply for an actual mortgage, compare the closing costs, bonuses, and rebates being offered by the providers in your options, and select the one that’ll cost you the least.
3. Have a Sufficient Disposable Income
To break down $233,610 into yearly payments, that’ll be $12,980, or $1,082 every month. And that’s just for one child.
Needless to say, the amount of disposable income you need should exceed those figures. Keep in mind that when you finally buy a home, you’ll also be paying real estate taxes and homeowner’s insurance, in addition to your monthly mortgage payments. So if the average taxes in where you live is 1.5% of a property’s value per year ($4,500 for a $300,000 home, for example.), and the insurance is 0.5% ($1,500), then that’s an additional $6,000 on your bills. Factor in utilities, which can cost more the bigger your home is. Hence, prioritize step one, which is a stable career.
4. Save, save, save!
When you’re raising kids and trying to buy a home, the simplest thing to keep in mind is to save. Limit your expenses, especially unnecessary ones, and don’t just save for a single milestone. Think about your kids’ college education and your retirement, too. Emergency funds are also crucial.
There’s truly a lot to take in when it comes to growing your finances, but that’s how smart budgeting works. It involves a lot of sacrifices to be able to give your family the comfortable life they deserve. Therefore, keep hustling, and all your hard-work will pay off in time.