Getting your finances in order is one of, if not the most, important step in preparing to buy a home and hiring a real estate agent.
The upfront cost are not the only expense you need to save up for. There’s the down payment you need to put on the home of your dreams, professional fees in case you need the advice of an expert or two, as well as repairs and other miscellaneous items.
Because of all the things you need to prepare for, saving enough money to fund your home purchase can take a while. Fortunately, there are several things you can do to fatten your bank account as quickly as possible.
- Determine your price range
- Try to settle your outstanding debt
- Divert your retirement savings to your down payment fund
- Tighten your belt
- Open a separate savings account
- Time your purchase
As early as today, it would be great if you already have a price range in mind. Aside from narrowing down your housing options later on in the process of buying a house, it will help you come up with a plan to finance your home.
For instance, with a set price range, you’ll be able to identify the mortgage plan that works best for you. Furthermore, you’ll have a rough idea of just how much you need to put down once you find the house you want. Down payments are usually 20 percent, but it’s possible to pay as low as 3 percent depending on the mortgage loan you’ll get.
Some of these loans that require low down payments ask borrowers to get insurance, which is paid monthly on top of the amortization. With all these considerations in mind, you’ll be able to allocate funds as needed.
One key to get pre-approved for a mortgage loan is to have a stellar credit report, which you can achieve by several means. Settling your outstanding debt can have a positive and significant effect on your credit rating.
If paying off all of your debt proves to be too much of a task, another route you can take is to try and reduce them as much as possible. This will show lenders that you’re responsible and can be trusted to make regular payments.
Out of all the expenses you need to prepare for buying a home, the down payment is the most important. So, you’ll want to get this done as soon as possible.
If you’re nowhere close to retirement age, consider putting a hold on your retirement savings and divert the money to your down payment fund. There is also a compromise if you want to save for both. Instead of diverting all of the money you usually allot for retirement from your paycheck, you can split it between the two at least for the meantime.
The latter will help you significantly augment your down payment fund without neglecting to save up for your retirement. As soon as you have enough, things can go back to normal.
There are various little things you can do to cut your spending during this period of saving for a house.
For instance, try and eat at home or pack some food to work instead of dining out. Instead of driving and spending money on gas, book a rideshare service to get to your destination. Do you have monthly subscriptions you don’t really care for? Perhaps now is the best time to cancel these and only keep the ones you really like.
It would also be a great idea to avoid making any big purchases, especially ones that might push you to make a new line of credit.
When you have quite a bank balance, it’s easy to feel a little spontaneous. The urge to use the money can be strong. To protect you (and your savings), make sure to funnel the money for your dream house to a separate savings account.
Doing so will help you spend only what you can and, most importantly, keep your eyes on the prize.
Consult your real estate agent about homes for sale in Las Vegas, particularly on the best seasons to buy a home. Purchasing during the busy months can have you spend extra cash on your dream home, while buying during the lean season can help you save thousands of dollars and avoid competition.
- Other tips that will help you save up for a house
- Ask for gift money during special occasions
- Take advantage of the gig economy and get a side job
- Start a small business that doesn’t require a high capital
- Sign up for an app that automatically saves a portion of your paycheck to your down payment fund
Do you want to learn more about homes for sale in Las Vegas and military home buying? Get in touch with me, Loralee Wood, today!