One of the most important things you must do when preparing to purchase a home is assessing your budget. You must be clear on where you are financially. What can you afford in a monthly mortgage? But also realize that your mortgage payment will often include other fees such as loan interest, property taxes, homeowners insurance and in some cases mortgage insurance. This will you give you a better idea of the price of home in which you should set your sites on.

Another thing you must be clear on is that there are also expenses associated with purchasing a home that you the buyer are responsible for, such as:

Earnest Money Deposits - required to show the seller that you are a serious buyer. The deposit could range from $500 - $2,000 with the typical being about $1,000.
Appraisal Fee - charged by an appraiser to estimate the value of the home. The cost can be $300 and up
Home inspection Fee - (optional) is an objective visual examination of the physical structure and systems of the home, from the roof to the foundation. The cost can start at $300 on up.

Closing Costs - are the charges made by those involved with the sale of the home. They range from 1%-8% of the price of the home but typically are between 2%-3%. Depending upon your borrowing power this cost could possibly be rolled into the mortgage.
Down Payments - The “no money down” option is usually reserved for those with high credit scores (700+). For most, a down payment is required. For a conventional loan it can be 20% of purchase price. Low down payment government loans (FHA or VA) are becoming increasingly available and can be 3% - 6% of the price of the home. (Consult your mortgage broker or lender)

Wait! Don't Panic. We have a few ideas about where you may be able to find the money for the above expenses.

Set a goal to save a certain amount in a certain time. Stash away an amount every paycheck that will help you reach your goal amount.

Tax Refund
This is a good source of funds. You can even increase the amount of your refund by changing your withholding exemptions from 1 to zero. This may be a good option for those who have a difficult time saving money.

Certain retirement accounts such as a 401(k) will allow you to borrow from them to buy a home. Consult with an Accountant.

In some cases the seller is sometimes willing to pay your closing costs when you pay the seller’s asking price.

Closing Cost Assistance Programs
Assistance may be available through your local Community Planning & Development office or nonprofit organizations. Check with your city departments and search the internet.

Down Payment Assistance Programs
There are down payment assistance programs available through the federal government and nonprofit organizations. Check these links for more information: HUD,
Nehemiah Program, AmeriDream, Partners In Charity, Homes For All Programs

Borrow from Family
Ask and you just may receive. Parents or other family members may be willing to let you borrow the money to buy a home.

Gift from family
Favorable tax laws will let each parent gift a certain amount without tax consequences.

Second Job
An extra income will allow you to save more money faster.

Sell your goods
Sell your unused electronics, bicycles, furniture, jewelry, etc. on Craig’s list, in a garage sale, or on eBay.

Where there is a will there is a way! With a little creativity, discipline and diligent research you can make your dream of homeownership a reality! For more ideas visit

Author's Bio: 

Christopher Shaw is a seasoned Real Estate Investor, with over 12 years of experience and has a passion for working with First Time Home Buyers, Mr Shaw has an ambitious goal of helping 1000 new First Time Buyers become home owners of the next 36 months. In addition to the 1000 new home owners he expects to create over the next 36 months wants to leverage each transaction to adopt up to 1000 families through Volunteers of America's Adopt a family Program.