With the new year starting most of us have new goals and aspirations we want to work towards, and with so much time spent at home, you might be thinking it’s time for a new house! But how to start saving up for a new home? We have gathered our best tips and important points you should consider to help you start saving for your dream home!
How Much Will You Need?
In order to start saving up for a new home, you will first need a good understanding of how much you should save. An experienced Mortgage Banker will be your best ally in helping to determine how much you can comfortably afford, what your monthly mortgage payments would be, and how much of a down payment you should aim for.
This will vary depending on your situation, but having a 20% down payment is not always necessary. In fact, for first-time homebuyers who financed their purchase, the median down payment is typically 7% and the median down payment for repeat buyers who financed is around 16% according to a 2018 survey by the National Association of Realtors.
Reach out to one of our Mortgage Bankers and they will be happy to help! These numbers will also give you a price range of the homes you will be looking at. For a total savings goal consider not only your down payment but also closing costs, moving costs, and the costs of any repairs you may want to have done to the house right away.
Double-Check Your Credit Report
When it is time for your Mortgage Banker to review your mortgage application, they will look at your credit report to review your credit history and make sure you have been paying your bills on time. You want to make sure there are no surprises or errors in your credit report!
Take Care of Outstanding Debt
If you currently have debt such as student loans, car loans or credit card debt, this can limit the amount of mortgage loan you can qualify for. If that is the case, your Mortgage Banker may advise you to pay off some of your outstanding debt, before you apply for the mortgage loan.
Cut Some Expenses
You should consider cutting expenses in order to pay outstanding debts and save up faster. The first step is to understand how much money is coming in and where that money is going out. You can do that by keeping track of your income and expenses, and then coming up with a realistic budget, making cuts where you find appropriate.
Increase Your Income
Another option that will help you save up faster is to boost your income. You can consider getting a part-time job or doing some freelance work; any extra money you make can go directly into your savings!
Set Up An Automated Savings Plan
When you have a good idea of how much money you want to put aside each month, you can set up a monthly automated transfer that will take the money directly from your main account into your savings account. Of course you can always manually add any extras to it!
With these tips and recommendations you will be on your way to saving up for a new home! And when you are ready to start searching for your new dream home, use our home search platform and get a cash reward of 0.5% of the value of the property you purchase when you work with one of our recommended real estate agents!
At Resource Financial Services, we love making people’s dreams of home ownership a reality. Visit us online today at rfsmortgage.com to get started. Then contact a Resource Financial Services mortgage banker at 877.797.4545 to discuss your mortgage options and your financial goals. Let us walk you through the process and welcome you home to a better mortgage.