4 Smart Ways to Save for Your First Home
Buying your first home is oftentimes the most exciting and most expensive purchase of your life! Though homeownership is an appealing prospect, being financially prepared for the endeavor can seem daunting. It’s important to consider ways to save up and be prepared. Here are four tips for new buyers who want to be fiscally sound before taking the leap.
- Review Your Debt
As obvious as it sounds, it’s worth noting: debt is not ideal when considering a purchase of this size. Not only does it add unnecessary burden to other aspects of life but also, lenders are quick to take note of your delinquent accounts. Your credit score, especially your on-time payment history, will affect the decisions of mortgage companies. At Minute Mortgage, we can help you pull and analyze your credit score so that you’re aware of any road-blocks on your path.
- Prepare for A Downpayment
Once you know where you stand with your credit, the next thing you need to know is how much you need for a downpayment. This analysis is crucial because it affects the trajectory of your saving: the sooner you know how much you need, the faster you can start funding your plans. Our loan advisors work with you to assist in crunching the numbers. They help you determine a ballpark goal for savings and explain how that downpayment will affect your loan cost and interest rate.
- Use Windfalls to Your Advantage
Yes, you want to buy a home but you still have to survive day-by-day and keep a nest egg of personal savings. Allocate a portion of your savings toward a new home – not every dime that you already have! Focus on tucking away large sums of money that are outside of your main income stream. Tax refunds, side-hustles, winnings and monetary gifts add up! These windfalls can propel your bottom line without affecting your other living expenses.
- Document Your Spending
It’s a fact that watching what you spend can actually help you save. Frequently tracking what you buy helps curb bad habits and reallocate funds into your home ownership budget. When it comes to larger purchases, lenders usually require extensive documentation of those types of transactions. Did you forget to record a few major expenditures? Another advantage of choosing Minute Mortgage is that we don’t require as much paperwork as traditional lenders do. Items that we do require can be sent through a convenient online portal when you’re on-the-go!
With these tips and a bit of discipline you will be well on your way to becoming a homeowner. It may seem like a lot of information but forming a savings plan early on will make it easier. Whether you are at the first step in the process and need to review your credit or if you’ve hit your goal and are ready for pre-approval, contact Minute Mortgage. We are here to help you at every point in the journey!
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- “What Down Payment Is Required?” Nerd Wallet, www.nerdwallet.com/article/mortgages/payment-buy-home. Accessed 16 Sept. 2020.