Every month you pay the rent, you’re probably thinking, “I wish this money was going into my future.” For a lot of would-be first-time home buyers, it’s the down payment which makes home ownership seem impossible. Climbing the “down payment mountain” isn’t impossible. Like any major challenge, it’s all a matter of breaking your big, hairy, audacious goal down into practical steps.
Here are some tips to conquer saving for a down payment:
Find out where your money goes. You can’t start saving if you don’t know where you’re spending. For a month or two, track each expenditure, no matter how small. Get an objective picture of where you’re spending the cash. If you are spending over $30 a month on coffee; maybe its time to buy a coffee maker and make your own? Most coffee houses sell ground coffee for at home brewing for a fraction of the cost of a daily cup.
Get specific about how much you need to save. Even if you’re not 100% sure what your down payment needs to be yet, it’s good to start doing a little math to figure out how much you need to save. Pick a dollar amount and a timeline to hit that dollar amount. For example, a $25,000 down payment in two years comes to $1,041/month. Sound unrealistic? Either scale down your home desires to something smaller or scale up your timeline. If you can wait three years, that monthly savings goal drops to $694/month.
Determine the big moves you can make. If you’re in a three bedroom apartment and can stomach the idea of scaling down to a one or two bedroom, how much would you save in rent? What about going from two cars down to one? If you can make it work, these sacrifices will have a huge impact on your savings goals.
Setup a separate savings account. Don’t let your dream home money mingle with your regular checking or savings account. Establish a high-yield savings account with a credit union or money market account to protect and build your stash. It’s important to have a separate account with a “hands off” attitude. There are some great deals at some of the online bank institutes.
Mind the risky investment schemes. Once you have a little momentum, you might be tempted to take some of that cash and invest it in order to make it grow faster. Be very prudent about this, as investing in stocks, startups, or high-yield funds can easily decimate your savings. Be conservative.
Of course, it’s important to know how much home you want to buy when you’re saving up for your down payment. We’re happy to give you an idea what homes are selling for in your area. And more importantly, we can put you in touch with a mortgage rep to determine how much house you can afford – reach out and we will help you make the first move towards your own home!
Barbara & Gregg, The Nicholas Team of RE/MAX Village Square Realtors email@example.com 973-509-2222
If you need more room for your growing family, or you’re simply relocating to a new town during the summer months, you may be wondering if bringing your kids along on the house hunting journey is a good idea.
In our experience, there are pros and cons to having kids with you as you try and find the next family home. Here’s what you’ll want to consider before you bring everyone along to open houses and showings.
- Liability matters. If you have a newborn strapped to your chest, it might not be much of an issue to walk through a prospective home, but toddlers are a different story. Your home may be kid safe, but not all homes on the market have been prepared to show with a free-range child in mind. Kids don’t necessarily understand this new home isn’t a playground, and there may be areas which are not explicitly safe for your little ones. ( And another thought: car seats! Be ready to drive in a separate car from your agent or have enough room for an extra adult in the car… see point #4 below).
- Is it an open house or a private showing? Open houses are often group affairs, and you’ll need to check your comfort level bringing your child along in these social settings. Kids can also get bored at these grown-up moments. Will you be able to focus on the home if your attention is split between the home and your kid? Kids are certainly allowed at open houses, but in general it is easier to maximize an open house kid free.
- Is it important to have your child with you? Sometimes, when you have an older child you want to help adjust to the idea of moving, it can be useful to lay the ground rules with your kid and make them feel as though they are important in the process. Teens can also provide valuable perspective on a new home, especially when it comes to checking out home amenities and the bedroom situation. Getting teen buy-in can ease the transition, especially when they’re leaving friends and familiarity behind.
- Sometimes you have no other option. If a babysitter is out of the question, or your schedule is such that having your child with you is a must, you should know that there’s absolutely nothing wrong with having your kid along for the ride. It can be useful to let your agent know, provided your agent is the one taking you on a tour of the property. This will help the agent remain alert for potential safety and liability issues, and may even help them tailor the time it takes to move through the homes.
We want your whole family to be safe during the home hunt and happy when you’ve found a place you like. Let us help you find the perfect home for your family… we can start our search today: Barbara & Gregg, THE NICHOLAS TEAM of RE/MAX VILLAGE SQUARE 973-509-2222 EXT. 1126 RealEstate@TheNicholasTeam.com
When you finally find your dream home, the worst thing that can happen is the deal falling through at the last minute. It’s more common than you might think, and the reasons are often surprisingly small. Fortunately, a little attention to detail and thorough planning can save you from the heartbreak of a buy gone bad. Here are some pitfalls for buyers:
- Last-minute shopping sprees. Until your home loan has been funded, big purchases are flat out dangerous to closing the deal. Your credit matters and so does your bank balance. Every time they take a hit (say for new furniture, appliances, or even a big pickup truck for moving day), you risk skewing your financial picture in a foul direction. Lay off the buying until you’re in the clear.
Last winter, we had a buyer who bought three rooms of new furniture two weeks before closing- Bob’s Store was running a sale with 18 months interest free new credit… this purchase delayed the closing by two weeks and required her to put the new furniture she bought for a house she didn’t own yet and had delivered into storage…good thing she had interested free payments!
- Not drilling down deep on seller disclosures. Nobody likes surprises, so ask all the questions you have about condition issues in the home or on the lot. Sellers must disclose, so you’re well within your rights to ask after anything which seems unreasonably unexplained. Finding out late can sour the deal or stick you with costly repairs post-closing. Ask your agent to perform an OPRA Request on the property-its a written request done at town hall asking for a history of permits pulled for any rehab or renovations done to a home. This will also give you reassurance that any work was done correctly, inspected and approved.
- Failing to clarify which “fixtures” are included with the house. Fixture can be one of those words open to interpretation. Get clarity on what is an appliance, what is a part of the home, and what remains the seller’s personal property. An early understanding of what’s excluded will prevent sour feelings later on. If you fall in love with the house based the purple chandelier in the dining room because it reminds you of the one Grandma used to have- make sure its staying. Seller can be asked to replace lighting fixtures but they aren’t always replaced with exact replicas.
- Not securing a preliminary title report ASAP. Great surprises lurk in the title search, so you’ll want to know in advance if there’s anything which might complicate the deal. You never know when someone might have an interest in the property (like an ex-husband), and you can’t be 100% sure about the property boundaries until you’ve defined them, can you? A misplaced fence or disputed driveway can foul things up in a hurry.
- Insurance surprises. Is the home in a flood plain? Will your rates be through the roof for hurricane or earthquake risks? It’s worth investigating early on in the process. You may still decide to buy the home, but you’ll at least be able to budget accordingly. Again, your agent should be able to do a little research to find out about flood plains, but your best bet may be to ask your insurance agent for the most accurate information.
I like to help buyers navigate the home buying process smoothly, armed with all of the knowledge they need in order to find the right home at the right price. Let me guide you to a smooth closing this year!
Barbara & Gregg , THE NICHOLAS TEAM of RE/MAX VILLAGE SQUARE 973-509-2222 ext.1126 RealEstate@TheNicholasTeam.com