In 1963, Martin Luther King, Jr. inspired a powerful movement with its famous “I have a dream”Speech. Through his passion and determination, he aroused interest, ambition and courage in his audience. Today, reflecting on their message encourages many of us to think about our own dreams, goals, beliefs, and aspirations. For many Americans, one of those common goals is home ownership: a piece of land, a roof over our heads, and a place where we can grow and prosper.
If you are dreaming of buying a home this year, start connecting with a local property profession understand what is going on in the process. With a trusted advisor at your side, you can then begin to answer the questions below to arrange yourself for a home-buying success.
1. How Do I Better Understand the Process, and How Much Can I Allow?
La process buying a home doesn’t go into a bit. You need to decide on key things like how long you plan to live in a region, which school districts you prefer, what travel works for you, and how much you can afford to spend.
Remember that before you begin the process of buying a home, you will also need to apply mortgage. Lenders will evaluate several factors related to your financial achievement, one of which is your credit history. They’ll want to see how well you’ve been able to minimize past debts, so make sure you pay off your student loans, credit cards, and car loans on time. If your financial situation has changed recently, be sure to discuss this with your lender as well. Most agents have loan officers they trust and will give you referrals.
According to ConsumerReports.org:
“Financial planners recommend limiting the amount you spend on housing to 25 percent of your monthly budget.”
2. How Much Do I Need For Prepayment?
In addition to knowing how much you can pay with a monthly mortgage payment, understand how much you will need for advance payment is another critical step. Fortunately, there are many different options and resources in the market to possibly reduce the amount you may think you need to put.
If you’re worried about saving for a down payment, start small and be consistent. A little bit of progress each month. Start your savings automatically by adding a portion of your monthly salary into a separate savings account or housing fund. AmericaSaves.org says:
“Over time, these automatic deposits add up. For example, $ 50 a month accumulates to $ 600 a year and $ 3,000 after five years, plus interest compounded.”
Before you know it, you’ll have enough for a down payment if you discipline and reflect on your process.
3. Save Time: Practice Living on a Budget
How tempting it is to spend the extra time you can spend at home today with some retail therapy, putting that extra money into your down payment will help speed up your path to home ownership. It’s about the little things, so start trying to live with a slightly tighter budget if you haven’t done so already. A budget will allow you to save more for your down payment and help you pay off other debts to improve your credit score.
A survey of millennial spending shows, “68% reported that shelter orders helped them save for their down payment.” Danielle Hale, Chief economist at realtor.com, also notes:
“If there’s any silver lining to the current economic landscape, it’s that mortgage rates surround record lows … Additionally, shelter-in-place bookings have helped many who have had the good fortune to keep their jobs in addition to down payment – one of the biggest obstacles to buying a home. The combination of low rates and the opportunity to save allows many millennia to raise their home purchase deadline. “
While you don’t need to cut all the extras out of your current lifestyle, making smarter choices and limiting your spending in places where you can shrink will make a big difference.
If homeownership is on your revolver this year, take a good look at what you can prioritize to help you get there. To determine the steps you need to take to begin the process, let’s connect today.
Content previously posted in Keep Current Things