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Saving tips for first time home buyers

Purchasing your first home is a huge accomplishment and the goal for many Americans. A home is an appreciating asset and owners are no longer spending their hard earned dollars on someone else’s property. However, some buyers are hit with sticker shock when they are faced with the amount for a down payment, inspections and closing costs. The down payment for a convention loan is 20% of the purchase price.  There are programs available that require as little as 3% down but buyers need to be prepared for an earnest money deposit, the remaining closing costs and lender required expenses to purchase a home. The challenge that some buyers face is where to begin saving. The following tips are helpful ways to begin injecting additional income into a separate savings fund.

Plan a budget

Many consumers are very relaxed with their finances and cannot easily provide a figure for what they have spent on groceries, entertainment and other expenses that are not fixed. Creating a simple spreadsheet and dedicating 10% of take home income to a savings account can add up quickly over time. Limiting unnecessary purchases such as a daily trip to the coffee shop or packing a lunch instead of going to a restaurant can quickly become additional savings toward a home purchase. Many consumers also find that planning their weekly meals saves them hundreds of dollars over the course of a year and prevents impulse purchases at the grocery store.

Don’t dive into debt

It can be tempting to place purchases on credit when adjusting to a new stricter budget. Mismanaged credit cards can lead to interest fees, late payments and opening new accounts can lower your credit score and debt to income ratio. Resisting the temptation to swipe the card and paying cash instead will make it easier to keep account of exactly what is available for spending throughout the month. Additionally, a purchase such as a new vehicle is a depreciating asset and the down payment would be a significant portion of a down payment for closing fees.

Pick up a few odd jobs

A simple way to add to a home savings fund is to add a few extra jobs to the week. There are many easy and readily available part time jobs such as dog walking, housekeeping, car washing, driving for UBER, and babysitting that can boost your savings in a matter of weeks. Resources such as community bulletins, local websites and classified ads will have postings available in your area.

For more tips and ways to save for a home or ways to save through a lender or negotiation, contact a Counts Real Estate expert today!

Written by Amanda Jermyn

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