5 Tips to Save for a House
By: Andrew Cartwright
Tags: Real Estate, Tips, Budgeting, Buying A Home, House

Photo by Cosmic Timetraveler on Unsplash

Buying a home is an accomplishment many Americans are always striving for. To reach this goal takes time and consideration before diving into this financial commitment so that you may find your dream home. There are additional costs besides your mortgage payment that are associated with owning a home that you must also prepare for. As a homeowner I and a real estate broker, these useful tips can lead you on the financial path to eventually own a home.

Determine how much you need

Before you can create a budget or begin to save, you should determine what you are looking for in your home. Consider how many bedrooms, square footage, and the area you would like to look for a house. Don’t overestimate how much you would like to have as that could mean higher mortgage payments.

Speak with a mortgage loan officer when possible to determine what types of loans you could qualify for. “Generally speaking, your housing expense should not exceed 28% of your stable monthly income,” states moneyunder30. The minimum down payment for a house is 20% but there are better deals that could reach up to 3%. A mortgage lender will help you determine how much you can afford based on your own financial circumstances.

Pay down debt

You may have other debts such as student loans, car loans, or credit cards that you have that can slow down your saving for a home. It’s best to pay down those debts as soon as you can so that you can free up more of your income to go directly to your savings. “That debt load can also make it more difficult to qualify for a mortgage.” Try to pay down your debt so that it is more manageable for you.

Cut your spending

Track your monthly spending to determine what areas you can cut back in spending so that you reach your financial goals. The most popular way to keep track of your spending is through technology. There are tools that are designed to notify you when you have exceeded your monthly spending and where you can easily monitor your spending through all your accounts. The money you have cut back on will help you eventually reach your goal.

Set up a savings plan

The best way to stay on top of your savings is to open a savings account. It will make the process a lot easier to track how much you are depositing to reach your time frame. Setting up an automated payment plan in place can also help you put away money automatically so that you never miss out on building your savings. Putting away bonuses, birth money, income tax refunds can help you build up your savings a lot quicker.

Pay your future mortgage

“This means that in addition to your rent put the difference between your rent and assumed future mortgage payment into your savings account and treat it as you would any other monthly bill,” states payoff.com. This a fantastic idea so that once you owe the home, you’re not overwhelmed with maintaining your other financial expenses and your mortgage payments. You’ll slowly start to get used to paying your mortgage along with your other bills.

Find the best way to help you reach your goal quicker. There may be setbacks that will pull you further from your goal, but find the motivation to keep saving.