Though real estate and housing typically costs more than all other living expenses combined, buying real estate need not be unnecessarily expensive. Living costs can for example, be reduced by up to 50% or more with sustainable, economical, self-sufficient lifestyles, even with conservation alone. Would purchasing real estate be more affordable if you had half of your income to spare? If not, a loan may be useful, but keep in mind that for about the first half of the entire term of a loan, most of each payment is applied to interest charged only. Getting the longest loan term available can help reduce minimum payment amounts, and thus reduce the risk of defaulting on the loan (by increasing your ability to pay). These savings can then be applied to the principal of a loan, thereby reducing the length of the loan term by as much as 15 years or more (so long as there isn't prepayment clause preventing you from doing this), while reducing the total cost of a loan by as much as 50% or more. There are other ways to save money when buying real estate however, so a loan should be the last resort.

For Sale By Owner

Real Estate agencies usually charge about 10-30% (their cut) more than the actual sale price of real estate, so buying directly through sellers will automatically save money. Many sellers will carry the contract themselves, and some may work with you on the down payment, interest rates and/or payment options. Some sellers may offer a lease with an option to buy, and will often accept lease payments as payments on the purchase price. Other buyers may also find that they can no longer keep up with their loan payments, or they decide to move before they finish buying the property, in which case taking over their payments can save time and money for everyone involved.

Working Your Way Up

Real estate is one of the best, most reliable forms of investment there is. With real estate, there is always a potential for profit. Even if you don't get a great deal, or you had to settle for something you find less than desireable because it was more affordable, or the housing market plummets, you can always improve and sell real estate at a profit in the future, because prices almost always continue to rise overall due to inflation and other economic factors, and people will always need a place to call home. Money made from buying fixer uppers, making improvements then selling later for more, could be used to buy more expensive and/or more desireable properties, until one can afford to buy what they really want.

Foreclosures and Reposessions

When buyers are in debt to lending institutions for the purchase of real estate and they fail to make their payments on time, lending institutions reposess and sell that real estate for the amount still owed by the previous buyer. Buyers of foreclosed real estate basically get a discount at the previous buyer's expense (and hopefully you're not the previous buyer). To find foreclosures, look up 'real estate loans' or 'banks' in a phone book (online or off) for the area you're looking to buy, call each lending institution and ask if they have any 'real estate owned homes', 'repossessed homes', 'foreclosed homes' or 'foreclosures', and be prepared to describe the kind of homes you are interested in. If they have a mailing list, ask them to put you on it, so they can send information to you about foreclosures they may end up with in the future. You'll be one of the first to know about any available foreclosed homes, before they are advertised in the local newspaper (the next place to look).

Tax Delinquent Properties

Like foreclosures, prices on tax delinquent properties usually start at the amount still owed, but in this case, for property taxes rather than loan payments. Some properties may go for as little as $100 or less, while others may cost much more, but whatever the price, it is nearly always much less than the real market value. To find delinquent properties online, use search terms such as 'tax delinquent properties', 'tax sales' or 'tax liens' in any of the major search engines. I have found many delinquent properties this way, but had difficulty finding them for all states. Arizona, California, Colorado, Illinois, New Mexico, New York, Texas and Wyoming seem to be the states with the most tax delinquent properties. If delinquent property listings for your state cannot be found online, go to the government section of a phone book (online or off) for the area where you want to buy, and look for 'county tax assessor', 'county treasurer' or something similar. Then call each office and ask specific questions, such as how, when, and where tax delinquent properties are advertised and sold in that county, and if there are any delinquent properties available currently. If they have a mailing list, ask to be added to it, so they can send you delinquent property listings as they become available. Purchasing tax delinquent properties may not be the best way to get your dream home of course, especially given that they are sold as is, though it can be a great way to work your way up from the fixer upper to what you really want.

Real Estate Auctions

Real estate can be purchased from private and government auctions for pennies on the dollar. Property sold at auctions is not always limited to real estate however, as it may also include personal property, such as cars, boats, planes, electronics, jewelry or antiques. Information about private and government auctions can be found in newspapers and online. Yet like tax delinquent real estate, property sold at government auctions has often been stolen from citizens, often via legal land theft, tax delinquency, or due to illegal means of purchase by original owners.

FHA
An FHA refinance mortgage or new FHA loan allows for the refinance or purchase of a home with a low down payment. These loans are great for the first time home buyer.