Saving for a Home
Think you’re ready to purchase a home? That’s a huge decision, especially if you’ve never purchased one before. It’s important to make sure you’re prepared for all the costs involved and have enough money saved for the home you want. Here are some information and tips to help you work on saving your way home.
Renting vs. Buying a Home
When is buying a better use of your money than renting? How can you know for sure that you’re financially ready to purchase a home? This blog post from the Consumer Financial Protection Bureau (CFPB) can help you think these questions through and make an informed decision about the right choice for you!
The Mortgage Process
Before buying a home, it’s important for you to understand how the mortgage process works. It can be rather complicated, so it’s understandable if you feel overwhelmed going into it. This step-by-step guide from Freddie Mac might help, especially the glossary included at the end!
Choosing a Price Range
Before you can really start thinking about saving for a home, you have to decide on your price range. This calculator from CNN Money can help you estimate how much home you can afford.
The Preapproval Process
While an online calculator can give you a general idea of what you can afford, mortgage lenders get the final say in how much home you can buy based on the amount they are willing to lend you. They provide an estimate of that amount through the preapproval process. This article from Experian explains how that process works and what you should do to be prepared going into it.
Your Down Payment
Wondering what percentage you should shoot for with your down payment? The fourth action step on this page from the Consumer Financial Protection Bureau (CFPB) provides some instructions for figuring out a down payment amount you can comfortably afford.
Outside of your down payment, there are some other costs of buying a home you need to consider. If you have a mortgage, your lender will require you to buy homeowners’ insurance. This buying guide from Consumer Reports gives you some things to think about when picking a policy and rates some of the largest insurance providers in the United States.
Other Costs to Consider
If you will be first-time home buyers, this article from Huffington Post provides a list of expenses you should estimate and work into your home purchase/moving budget. If you have purchased a home before, it can’t hurt to review the list and make sure there aren’t any items you’ve forgotten since your last purchase!
Escrow is a word that gets thrown around a lot, but not many people truly understand what it is and how it can benefit home buyers. The Consumer Financial Protection Bureau (CFPB) offers a brief description and some tips that can help you understand the basics.
So, you have a general idea of the amount you need to save, but that number may seem like it will take forever to hit. How can you possibly save that much? This CNBC article has some ideas of things you can give up to help you save money for your home more quickly.
Looking for more tips about saving for a home as quickly as possible? This USA Today article has some ideas that can help you prioritize how you spend and save your money to reach your savings goal faster. Spoiler alert! Tips may force you to change your coffee habits!