Saving for a Down Payment

Saving for a Down Paymentsaving

The thought and process for saving a down payment to purchase a home may seem overwhelming at first. Never fear, we’re here to help. Breaking the process into small, actionable pieces might just help you afford a home sooner than expected.

  1. Calculate what you can afford

Your first step in saving for a down payment includes deciding what you can afford what you are looking for in a home. Start by making a list of basic requirements including size, location, school districts, etc. When determining affordability, calculate the potential monthly payment plus homeowners’ association fees, taxes, insurance, utilities, maintenance and other related expenses. We recommend using one paycheck to cover all homeowner expenses if you’re one half of a dual income partnership.

  1. Determine how much a down payment you need

We recommend saving at least 20 percent of the purchase price. Lenders require 20 percent or more down for a conventional loan. Although, other loan options exist which require much smaller down payments, some as low as 3.5 percent. However, these loans require that you pay mortgage insurance. This insurance protects lenders if borrowers default on their loans. Once you know the price range you can afford, use this down payment calculator to get started saving.

  1. Create savings plan

One tip to help you save includes automating portion of your income. Options vary from choosing a fixed amount to choosing a percentage from either your paycheck or checking account. Whichever option you choose, deposit the portion into a separate cash savings account. You also can try the $5 bill savings plan where every time you receive five dollars as change you set it aside. Also, consider setting aside raises, bonuses and tax refunds. Combining all of these tips will help you get into your new home that much quicker.

  1. Build your equity

After all of the scrimping and saving, you deserve a congratulations for making your home purchase, but the benefits don’t stop there. As you make your mortgage payments each month, you own more and more of the property that builds equity over time. Equity that you can later use for a larger down payment on your next home or for an investment property. Either way, building equity ultimately builds your wealth.

Help make your upcoming move a little easier!

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The holidays are a wonderful time of year and a very busy time of year. For those who are preparing to move, this is an even busier time of year. Help make your upcoming move a little easier!  Here are 3 important tips to follow—

  • Get organized. Before you begin packing up your stuff, take a moment to go through your items and determine which items you no longer want. The more you can get rid of the items you don’t want or need the less you’ll have to haul to your new home. So, take a moment to go through your stuff and donate it to your local Goodwill or Salvation Army or sell the items on KSL or Craigslist.

  • Holiday spirit. If you have young children, they won’t understand the holidays will be postponed or altered due to the move. To help ensure they still have a magical Christmas, take some time out of your busy moving schedule to plan ahead and have some presents for them to open. Plus, don’t forget about Santa Claus and make sure he knows about your new address.0
  • Change of address. Tis the season of holiday cards! Instead of mailing out change of address cards to your family and friends, let them know of your change of address in a fun, festive way. While you’re at it, remember to update your address with your utility companies, bank or credit union, and other important vendors or organizations who need to know your new address.

Do you have any tips to making the move a little less stressful? Share your stories, tips, and thoughts with us below.

Tell-Tale Signs You’ve Outgrown Your Home

Tell-Tale Signs You’ve Outgrown Your Home

Once upon a time, Realtors came up with the term “starter home” to describe houses perfect for newlyweds and small families. Although these starter homes are great, families quickly outgrow them due to various reasons. Whether you’re out of storage space, feeling cramped or just need a change of pace these are the tell-tale signs that it’s time to move on.Rob Andre Widget

  1. New Additions

Often families outgrow their homes because they are expecting little bundles of joy. The addition of children or even pets can easily begin bursting the seams of your perfect newlywed home. When bedrooms have filled up and toys have taken over the entire house it’s time to upgrade to a larger a home.

2.  Aging

Outgrowing your home usually sounds like you need more space, but sometimes you might benefit from downsizing. As couples age and their children leave the nest, a home that was once the right size might become too large and difficult to maintain. Choosing to downsize into a more comfortable space could also help stretch retirement dollars.

  1. Not enough space

As a family grows in numbers so does accompanying furniture collections. Families often opt for over-sized pieces of furniture to accommodate everyone in the home plus guests. These large pieces of furniture take up a lot of space. They easily start to crowd a home and make it feel cramped or small. Many consider upgrading to a larger home to accommodate them and all of their belongings.

  1. Complicated Entertaining

Many families like to entertain their friends and loved ones. For these families entertaining becomes a big factor when deciding to upgrade and purchase a new home. As you grow, you may end up hosting a large holiday party and the need for more space will become more imminent. It might be time to move on if you find out that your current home doesn’t share you sense of hospitality.

  1. Your Finances are in order

Many families move on simply because they are in a better financial situation to do so. A recent job promotion or inheritance can allow you and your family to purchase a larger home or move into that perfect neighborhood. Your improved finances provide the opportunity to live comfortably and enjoy the space that you worked so hard to earn.

Homeowner’s Association

If you’ve been considering buying a townhome or condo you’ve probably been hearing the term HOA a lot. But what does it mean?

HOA’s, also known as Homeowner’s Association, is a governing body over a complex or community which comprises of people who are serving on the HOA board. When you purchase a townhome or condo, you automatically enter into the association. Before you think you can get out of paying the HOA fee, the fact is you can’t avoid this. The simple(ish) act of buying a home enters you into a contract with the HOA which means you must follow their rules, pay your monthly dues, and any special assessments.

While looking into buying a townhome and condo, it’s important to take some time to understand the rules of the HOA along with the fees. Each fee differs for each community so be sure to ask these questions.canstockphoto0280140

  • How often to HOA fee’s increase?
  • How are HOA fee increases set?
  • How large is the HOA’s reserve fund?
  • What do the monthly dues cover? Will you have to pay extra for trash, water, snow removal, etc?

There are also some benefits around having an HOA. Because of the standards placed by the HOA, you’re more likely to see yards that are well kept up and homes that are in good repair. In addition, you have less home maintenance (exterior-wise) because most HOA’s cover to have the common areas are taken care of by the association. This may include trash, snow removal, and lawn care.

In some cases, HOA’s may also provide recreational amenities such as swimming pools and tennis courts. To find out what your potential HOA covers, ask you realtor to get the information from the seller.

Ready to buy a townhome or condo? Give us a call today and let us help you find your dream home.