How I Bought My First Home with Less Than $9,347 in Savings

When I first started thinking about buying a home, I felt like the odds were stacked against me. Everywhere I turned, people said you needed tens of thousands of dollars for a down payment, closing costs, and unexpected expenses. As a young professional with less than $9,347 in savings, that seemed impossible.

But I was determined. After months of research, creative financing, and a lot of budgeting, I managed to achieve what seemed out of reach: buying my first home. Here’s my journey and how you can do it too, even if you don’t have a massive savings account.

• Read also: 5 Ways My Childhood Apartment Inspired My Real Estate Career

The Dream That Seemed Out of Reach

Feeling Behind in the Game

I’d been renting a tiny one-bedroom apartment for five years, watching my rent go up every year. I was tired of throwing money away on rent, but buying a home felt like a pipe dream. Most of my friends who bought homes had family help, big bonuses, or years of savings.

Me? I had a modest job, some student loan debt, and about $9,347 in my savings account. It didn’t seem like nearly enough, but I was tired of waiting. I decided to see if there was a way to make it work.

Step 1: Understanding What I Could Afford

Getting Real with My Budget

The first step was figuring out what I could actually afford. I knew that buying a home wasn’t just about the down payment—there were also closing costs, taxes, and ongoing expenses like maintenance and utilities.

I started by looking at my monthly income and expenses. After some number-crunching, I figured out I could afford a mortgage payment of around $1,000 a month. With current interest rates, that meant I was looking at homes in the $150,000 to $180,000 range.

Using Mortgage Calculators

I used online mortgage calculators to break down potential costs. I factored in:

• Property taxes
• Homeowners insurance
• Private mortgage insurance (PMI) since I couldn’t afford a 20% down payment

This gave me a clear picture of what I’d be paying each month and reassured me that homeownership was within reach.

Step 2: Exploring Low Down Payment Options

The Myth of the 20% Down Payment

Like many first-time buyers, I thought I needed a 20% down payment to buy a home. On a $150,000 house, that would be $30,000—way more than I had. But through my research, I discovered several programs that allowed me to buy a home with much less upfront cash.

The Loan Options I Considered

1. FHA Loan: Requires a down payment as low as 3.5%. On a $150,000 home, that’s just $5,250. FHA loans are popular with first-time buyers and have more flexible credit requirements.
2. Conventional Loan: Some conventional loans allow down payments as low as 3%. That’s just $4,500 on a $150,000 home.
3. USDA Loan: If you’re buying in a rural area, you may qualify for a USDA loan, which requires zero down payment.
4. VA Loan: If you’re a veteran or active-duty service member, VA loans also offer zero down payment options.

After comparing these options, I decided to go with an FHA loan. The lower down payment and flexibility made it the perfect choice for my situation.

Step 3: Finding the Right House

Prioritizing What I Needed

With my budget and financing in place, it was time to start house hunting. I knew I couldn’t afford a move-in ready mansion, but I didn’t want a total fixer-upper either. I prioritized:

1. Safe neighborhood
2. Two bedrooms (one for me, one for a potential roommate)
3. Minimal repairs needed

Looking Beyond Perfect

I knew I had to be realistic. The houses in my price range weren’t going to be perfect. But I was okay with that. Instead of focusing on cosmetic issues like old carpets or dated kitchens, I looked for homes with good bones and potential.

Step 4: Covering Closing Costs

The Hidden Expenses

Closing costs were one of the expenses I hadn’t fully understood at first. They typically range from 2% to 5% of the home price. For a $150,000 home, that meant anywhere from $3,000 to $7,500.

How I Handled Closing Costs

1. Negotiating with the Seller: I asked my real estate agent if the seller could cover part of the closing costs. To my surprise, the seller agreed to cover $3,000 of the costs.
2. Lender Credits: My lender offered to cover a portion of the closing costs in exchange for a slightly higher interest rate. This saved me another $2,000.

These strategies reduced my out-of-pocket closing costs to about $2,500, which I could manage within my budget.

Step 5: Getting Creative with the Down Payment

Dipping into My Resources

With my FHA loan requiring a $5,250 down payment, I still needed to bridge the gap. Here’s how I made it work:

1. My Savings: I used $4,000 from my $9,347 savings.
2. Gift from Family: My parents were able to gift me $1,500 to help cover the rest.
3. Side Hustle Income: I picked up extra freelance work and saved an additional $500.

This gave me just enough to cover the down payment and remaining closing costs.

Step 6: The Move-In and First Months

Budgeting for Immediate Expenses

Moving into my new home felt surreal. But I knew the first few months would be tight. I had to budget carefully for:

• Utilities: Setting up and paying deposits for electricity, water, and internet.
• Basic Furniture and Supplies: I bought second-hand furniture and used what I already had.
• Home Insurance: Paid upfront for the first year, which was rolled into my closing costs.

To make things easier, I rented out the second bedroom to a roommate, which covered about half of my mortgage payment.

Lessons Learned from Buying My First Home

1. You Don’t Need a Fortune to Buy a Home

I learned that with the right loan programs, negotiating skills, and a realistic budget, you can become a homeowner even if you don’t have tens of thousands saved up.

2. Research Is Your Best Friend

Understanding different loan options, closing cost strategies, and the home buying process was crucial. Knowledge gave me the confidence to make smart decisions.

3. Be Ready to Compromise

My first home wasn’t perfect, but it met my needs and budget. Focus on what’s essential and remember that you can always upgrade over time.

4. Get Creative with Financing

Between FHA loans, seller concessions, and lender credits, there are more ways to finance a home than you might think. Don’t be afraid to ask questions and explore all your options.

You Can Do It, Too

Buying a home with less than $9,347 in savings might sound like a stretch, but it’s possible. If you’re dreaming of homeownership, start by:

1. Researching low down payment loans like FHA, USDA, or VA loans.
2. Setting a realistic budget based on what you can afford monthly.
3. Exploring creative ways to cover closing costs and down payments.

You don’t have to be rich to own a home. You just need a plan, some determination, and a willingness to think outside the box.