Planning ahead and saving money can pay off sooner than you think

When Sherry Bartley graduated from college, she looked forward to having her own apartment, getting a job, being independent and enjoying city life. It didn't take long, however, for her enthusiasm to wane. "I couldn't believe the price I would be paying for a one-bedroom apartment, and no utilities were included," Sherry said.

A relative suggested Sherry look into buying a condo, but she didn't have money for a down payment, so she decided to delay her independence and live at home to save money. Young and single, she had to work to avoid spending money on items that would not provide a long-term benefit, such as clothes and cappuccinos.
 
In about a year Sherry felt she was ready to buy, but to avoid the disappointment of choosing a home she could not afford, she talked with mortgage lenders first. She researched several loan types, services and costs, and chose a lender based not only on those criteria but also on her level of comfort working with that person. "The paperwork was overwhelming and there was a lot to learn," she said.

She found a one-bedroom condo in her price range outside the city limits, and she had saved enough to put 5 percent down. At age 23, Sherry owned her first home. While she enjoyed decorating it, it was most important to her that monthly payments were building equity, which she later put to good use.

In five years she was able to sell her condo, take the equity (the difference between what she owed the lender and what she sold the condo for) and buy a larger townhome. Even though she was young and single, by saving money and learning about mortgages, Sherry was able to use the lessons learned from her first home buying experience and buy her second home at age 28.