“I’ll never be able to afford a house."
First, know that you should only begin the process of buying real estate when your finances are in good shape already. And saving up a down payment takes time!
To get motivated, try prequalifying for a mortgage with a mortgage lender, even before you’re serious about buying. The lender will offer suggestions about how much you’ll need for a down payment and tell you how much money you’ll be able to borrow. That’ll give you some savings goals to work toward, says Blaylock. And be careful—you can often qualify for more loan than would be truly affordable for your budget, so it’s super important to look at what works for your monthly cash flow, but getting pre-qualified is a good place to start.
One of the best things that you can do to be able to buy a house in the future is to make sure that your debt is managed properly now, says Blaylock. For example, late credit card payments will hurt you, because those will negatively impact your credit score, and that could impact the interest rate you’ll get when buying a home. Another factor to consider is your debt-to-income ratio, which creditors will evaluate before deciding whether to give you a loan.
If buying a house is still a few years off, see where you can find room in your budget now for a down payment fund. But, keep in mind that flexing your savings muscle now, and having a goal to work toward, is one of the easiest paths to get where you want to go.