With interest rates down and inventory up, many savvy consumers are taking a good,
long look at investing in a home of their own. The benefits are big and the rewards
buying a home long-reaching. For some consumers – a down payment is the only
thing standing between them and the dream of home ownership. In today’s economy,
it’s not always easy to save the necessary funds to not just get into a house of your
own, but get a decent interest rate as well. Here are some simple things you can put
into your personal or family action plan for saving that down payment money in less
time.
1. Get in the know. Like any good budget or
savings plan, the first place to start is to determine
where you are NOW in relation to your credit score,
your monthly bills and assets. Contact me or a
trusted mortgage professional to see how much
home you qualify for and how much you’ll need to
save to purchase your home. We can help you take
a look at things like credit scores, loan requirements
and interest rates now so you can be simultaneously
doing ALL the things right during this savings period
to ensure the most favorable rate and terms.
2. Set a deadline. I know deadlines seem ominous
to some, but they can be powerful motivators to
accomplish great goals. (And buying a home is a
pretty big goal!) Again, once you know where you
are – it will make setting a timeline easier. For some,
step one of the savings plan may be paying down or
even off some past debt with high interest – which
could back up your time table. Together, we can
help you figure out which direction is best for you.
3. Create a “Down Payment” account. Ever see
those little ceramic pots with “House Fund” or
“Vacation Fund” on them – or the piggy banks with
the “do not open ‘till holiday shopping time” labels?
By opening a savings account just for your future
home purchase, you help lessen the likelihood of
tapping into that money for other things. Check with
your bank, or even local credit unions to see if they
offer any special interest rates or programs for first
time home owners looking to buy.
4. Take a good, long look at your monthly bills.
Do you have credit cards or revolving credit with
high interest rates and high monthly payments?
That’s doing two things to hurt your cause. First –
those interest rates are costing you big and just
money out the door. Secondly, those high payments
are bad news for your debt-to-income ratio. You may
have to tackle those bills first and get them behind
you. Make a list of your creditors, how much you
owe, the interest rate and the monthly payments.
Take the highest interest rate one first, get it paid off
and then work on the next one, etc. (Plus it feels
REALLY good to pay those guys OFF!)
5. Automate your savings. Out of sight, out of
spending reach. Once you’ve figured out how much
you can sock away every month, have that amount
automatically withdrawn from your account and put
into savings before you even see your paycheck!
(Most employers can do this in a simple step if you
are direct-depositing.
6. Ask about IRAs. If you have IRAs, check to see if
yours has any first time home buyer benefits. Some
will allow you to invest a considerable amount of
pre-tax dollars and withdraw without penalty for
home purchases and they often provide more return
on your investment than a traditional savings
account. Check with your IRA provider or financial
advisor first!
7. Every little bit counts. This is the fun part. Get a
money container for your house. You can make it as
decorative or as plain as you like. From a beautiful
glass jar (where you can see your results) to a
coffee can (where you can hide your treasure) – and
make a pact with yourself, your spouse or significant
other and even your kids. Each week put whatever
you can in the jar towards your house fund. From
leftover change from the store, to the couple dollars
here – into the jar it goes. In fact, whatever you’d
NORMALLY spend – save instead – such as
forgoing the coffee house vente latte at $6 a pop
every day – that’d be $42 a week you could put in
there. Or pack a lunch instead of buying. You could
save $5-$10+ a week. That’s another $25! (Plus
you’re not wasting food! Bring those leftovers to
work!) Make it a fun thing every day and at the end
of the week count up your accomplishment, put it in
an envelope with a deposit slip and put it into your
savings. It’s amazing how fast it can add up when
you make it a contest or a fun thing for the whole
family!
Saving for a home of your own can be challenging, but it can be exciting too. The
feeling of reward and accomplishment is extraordinary. Start with these seven steps
and very soon you too can enjoy the long term benefits of setting down roots and
investing in your future. You can also browse available homes for sale on our interactive website.
Know that I’m always here to help. As a Real Estate Professional and Neighborhood
Specialist, I can help you customize a savings plan all your own so that you can be
sure your family is heading in the right direction every step of the way! Call me today.
Tags: adam franzetti realtor, buy a home, buy a house, down payment for a house, franzetti real estate, home down payment, house down payment, sunset pointe home specialist
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