November 7, 2019 7 Best Strategies to Save for a Home
Whether you’re moving out of your parents’ house, upgrading from an apartment, or just interested in making a change, Central Federal is here to help you buy a house. There are a lot of steps in the process of becoming a homeowner, but saving should come first. Here’s a look at our 7 best strategies to save for a home.
The first step to saving for a home is finding one. Check out all of the popular real estate listing websites to give yourself an idea of how much a place might cost. Figure out if you want a three- or five-bedroom, how many bathrooms you require, and if you want a basement or not. Personal preference is key here as this is an important decision to make!
Time It Right
When it comes to buying a home, the timing has to be right for you. First off, homeowners-to-be should plan out a timeline of when they intend to buy. Consider other major events in your life right now. Can you afford to start budgeting for a house with your current bills or debt? Secondly, buying or selling real estate can be seasonal. According to CNBC, fall and winter give buyers more negotiating power. If everything isn’t aligned, wait until it is. There are plenty of people looking to sell all year round.
Adjust Your Monthly Budget
In order to make room in your budget, it’s time to eat out less, cut coupons, and watch your daily spending. It may not seem like a lot at first, but skipping your morning Starbucks run could save you $660 a year. Seriously! The average cup costs $2.75, so five cups a week for 12 months adds up fast. Credit card and payments toward your debt can be adjusted, too. We recommend that you try to pay more than the minimum, but this is where having a detailed budget will pay off. Check to see where you can pay less per month and repurpose that money toward your home savings.
Prepare for the Down Payment
Now that you have a plan in place and your new monthly budget is set, you need to prepare for the down payment. Let’s start by determining what it might be. While putting 20% on your property may be the “popular” thing to do, there’s really no reason to create that expectation for yourself. Central Federal offers a variety of home loans to help you determine how much to pay upfront:
- USDA Home Loans – no down payment
- VA Home Loans – no down payment
- FHA Home Loans – low down payment
- Conventional Home Loans – no PMI with a sufficient down payment
Calculate Your Mortgage
Here’s what you should know by now: the price of the home, when you’re thinking of buying, how your new budget will look, and the amount you need to save for a down payment. The next step is crucial as it will determine your ability to make a new monthly payment – the mortgage. Luckily for you, Central Federal has an online mortgage loan calculator that will give you an accurate estimate. Enter a few numbers, which you can get from your realtor, and let us do the math for you.
Negotiate the Sale
It may not seem like one, but negotiating certainly is a strategy for saving. Find a real estate agent who can negotiate with the sellers to take care of anything extra before anyone signs a contract. Things you both can work on include the asking price, any necessary repairs, and even closing costs.
Take On a Second Job
As a last resort, there’s always the possibility of taking on a second job. Rideshare companies are always welcoming new drivers and allow for flexible hours. No one should ever feel less of themselves for working outside of their normal hours to help save up for a loan or pay one off.
What do you think? Are you ready to start saving for a house? Follow our strategies, visit us online at www.centralfederal.com, or stop in at our location in Rolla.