How To Save For A New Home

Owning a home is a big part of achieving the American dream. You might be thinking that you can’t afford a home on your salary and it will be impossible to pay off but, if you learn to budget and save the American dream may be closer than you think.

Today home prices are going through the roof. So how much of a home can you afford? The first determination factor is to figure out the down payment. Years ago, banks required at least 20% down but today things have changed and now you can buy a home with no money down, but you are still be responsible for the closing costs.

Affordable Tips On How To Save For A New Home

You might want to energize your savings plan as soon as possible. Once you have determined where you want to purchase your home, take a look at home values in that area. Look at your finances and save wherever you can.  If you spend money on things you can do without then you should start there. Keep your budget simple.

It is important to put some money down when purchasing a home. Even though banks might not require a down payment put at least something down. Take a look at how much money you have saved. Take a look at how much debt you have. If you have less than 20% down at closing, you may have to pay PMI (private mortgage insurance).

In order to buy that home you will want to have a low debt rate.  Credit cards with high interest is not something that you need when looking to buy a home.  It can eat away at your budget and send you into financial ruin.  Sit down with your loved one and go over your financial statements. Look at everything that you owe. Look for ways to cut down on that debt. If you are someone that uses their credit card frequently, consider using cash to cut back on the debt. To consider getting a mortgage the bank will look at how much debt you owe, your annual salary and your FICO score.  Before you buy a home you might consider pre-qualifying for a bank mortgage. Once you find that home it will be one less thing to worry about.

Once you find the home of your dreams it is important to do a home inspection and an appraisal. An inspection will tell you what repairs have to be made and how much you may have to shell out. An appraisal tells you the value of the house. If there are a lot of repairs to be made, consider asking the homeowner to fix the problems or a discount on the price.

Buying a home is a big deal

It is one you should feel proud to make. It is exciting to become a homeowner but, it is also terrifying decision to make. Remember to keep things simple. You may want to rent out your downstairs apartment if you own a two family home. get references and do a credit check on your new tennent. Take the money from the rent and put it on the mortgage. To save on your mortgage pay an extra month every year. Never be late on your payments. This all goes down on your fico score… The higher your fico score the safer a risk you are.