HOW TO SAVE UP FOR A HOUSE
Are you thinking about buying a home and just don’t know where to start? Before you even begin looking at homes, consider how much you may need to save to make the process as smooth as possible for you, especially in the long run. While there are situations where you don’t need a large down payment for a home, having one can save you money down the road.
Saving for a down payment is slightly different than other large savings, like retirement. With those savings, you can set aside smaller amounts or invest the money. Because you will need your down payment sooner rather than later, those saving methods won’t be beneficial to you. Here are some steps to take to save up for your dream home!
1. Determine How Much You Need
There is a general rule of thumb in real estate, the rule of 28, that says your maximum mortgage payment should not exceed 28% of your gross monthly income. Sitting down with a mortgage lender will help you find out how much of a mortgage you qualify for based on that income. They will be able to tell you the recommended amount needed for a 20% down payment. Whether or not that is a requirement, a 20% down payment can get you a great price deal and reduce your monthly mortgage rate.
2. Decide When You Want To Buy
The next step will be deciding when you want to buy. This will give you either a monthly or annual goal of how much money you need to be setting aside to reach that down payment goal.
3. Choose A Savings Plan
It it usually best to avoid stocks or other risky investments when it comes to saving for a home. Consider opening a regular savings account specifically for your down payment, and make sure it is an account you use for deposit-only purposes until you’re ready to make your down payment. See more @janetjsells
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Janet "JB" Melton - Real Estate #shopseewelcomehome #resultsthatmoveyou #dfw #realtor #remaxpreferredassociates #remaxagent #buyersagent #buyer #seller #investor #realtorstyle @thefashiondendallas #realtorlife #buildingwealth #allthingsrealestate