Most wealthy people also own their homes.
OK, so maybe you can't do that right now. But you can take some steps to get started.
First, request copies of your credit report from the three credit agencies: Experian, Equifax and TransUnion. You can get a free copy by going to annualcreditreport.com. Mistakes are common. If you find any, contact the agencies directly to fix them. If the report shows you have lousy credit, start taking steps to improve.
You'll also need to come up with cash for your down payment -- typically around 20% of the home's price. If you don't have enough to cover it, you have several options. First-time homebuyers can withdraw up to $10,000 without penalty from an IRA, if you have one, though you'll owe taxes. Got a Roth IRA? Even better. You can withdraw any contributions you made without paying taxes or penalties. You can also receive a cash gift of up to $15,000 a year from each of your parents without triggering a gift tax.
Check whether your employer can help; some big companies will chip in on the down payment or help you get a low-interest loan from selected lenders. You can also tap a 401(k) for a loan from yourself.
More on buying a home
