According to a report from the U.S Census Bureau, more than 65% of the state's citizens live in their own homes. How do I start saving for a house, you ask? Purchasing a house can seem like an uphill task. However, a workable saving plan can help you reach your dreams much faster and with ease. Here are some steps to guide you through.
The first step into saving for your dream home is determining the overall cost of owning a home and the amount you'll need to keep aside. That will also help you draw out a saving plan along with a deadline.
A down payment is typically the heaviest log to move as far as saving for a house is concerned. Most mortgage lenders advise on having at least 20% of the total price of your dream home as a down payment. This is a great move, as it saves you the private mortgage insurance (PMI) monthly costs in the long run.
However, it's not mandatory. First, some lenders will offer you loans on a 10% down payment or less, especially if you have a high credit score. Also, qualifying for a government mortgage may also lower the rate. Most of these loans require a 3% or less down payment if you are eligible. Some of the most common government financing towards buying a house include:
Alongside the down payment, you may also want to consider the kind of home you want to buy, location, moving costs, and closing costs. All these factors will affect the overall cost of your dream home and the amount you'll need to save monthly or per paycheck.
Review all your credit card payments, bank statements, and every other account to know where your money goes. That will lead you to know how much you spend on the necessities and how much goes into unnecessary subscriptions.
With the knowledge, draw a workable savings plan, and stick to it. You should consider opening a house-buying savings account and allocating a percentage of your salary that goes there. Making it a non-optional expense will help you focus.
Minimizing your expenses and downsizing are the fastest methods to save for a significant purchase like a home. Look around the house and see any recurring purchases, subscriptions, or expenses that you can do without, or reduce and channel the savings to your house-buying account. You can also move into a smaller house or sell that extra family vehicle, or cut the cord on your cable television.
Consider investing every unexpected sum you get back into your house-buying account. These may include tax refunds, work bonuses, and more. Again, it may be tempting to access some of the extra funds. As a result, restricting access to your house-buying account will make the savings safer.
Setting a time limit and savings amount for your project makes it easier to hit the target. If you find out that your salary isn't enough to propel you to your savings target, it's time to think of maximizing your earnings. You may consider asking for a raise from your employer or starting a part-time job.
The best time to start saving for a home is the very moment the idea of owning one crosses your mind. Remember, the sooner you start saving for it, the faster you move towards achieving your goal. Buying a house can be quite costly, but Lend Smart Mortgage is here to help you through the process. Contact us for more information.
We are a direct lender and a broker who will work one on one with you to exceed your expectations. If we don’t have a product that makes the most sense for you, we’ll find the lender that does. We’ll make sure you have the best loan at the best price. Choose Lend Smart- it’s the smarter way of doing business.