How You Too Can Afford Your First House

Home ownership can shift from being a dream to a reality for first-time home buyers, even those with modest incomes.

Renting is not cheaper than owning, although it may seem that way, especially with the average single family home costing $200,000 (excluding major cities, where the prices are much higher).

That rent money you dole out every month? It has no value beyond the 28 to 31 days you live in your rented apartment or house. The rent money is an investment in someone else's net worth, not in your own. Why continue to add to someone else's bottom line instead of your own? At the end of the day, don't you want to invest in your own net worth?

So what are the most affordable ways to make the move from being a rent to a first-time buyer?

Most Affordable Way to Buy Your First House: Compromise on Features

Be willing to compromise on what type of house you will suit your family when buying a house. First-time buyers may not be able to buy their dream house. If you are willing to accept that, and make other compromises, you can and will be able to find a house that works for your family. The house does not have to be perfect, or have every amenity that you seek. Determine which features you absolutely need, and which ones you are willing to live without in order to own your own home.

Most Affordable Way to Buy Your First House: No Down Payment

Believe it or not, having a $10,000 down payment or less will not make much of a difference in your monthly mortgage payment. In fact, first-time buyers do not even need a down payment in order to purchase a house. If you cannot save enough money each month to build the money for a down payment, that should not stop you from trying to buy your first house.

Most Affordable Way to Buy Your First Home: Neighborhood Oddities

Some houses on the market may have some neighborhood or geographic oddities. The home may be located across from a town-owned watershed, or near a cemetery or a school. Look at the positive aspects of these neighboring features. When there is a watershed or cemetery next door, the first time home buyer will not have to worry about the land being developed.

Houses with these type of oddities next door are typically priced lower than other comparable homes in the area.

Most Affordable Way to Buy Your First House: Rental Property

Sometimes first-time home buyers need to put the idea of owning a single-family home on hold, and instead purchase a more affordable home with rental income potential. This could include buying home with a separate "in-law" apartment, a studio apartment above a garage, or a two-family or three-family home.

The rental money received will help you pay off your home's mortgage, and give the first-time home buyer a little more breathing room when it comes to paying off monthly expenses.