For first-time homebuyers, nothing can be as daunting as the thought of where to start. A considerable amount of time needs to be set aside to research, read and become educated on the real estate market. There might still be a couple of things you’ll look back on and wish to have done differently, but there’s no excuse for not being prepared on such an important purchase.
Trust us, the earlier you start saving, the easier it will be to afford a home. If you’ve decided that a home purchase is in your future, start saving for the down payment. If you can bring your mortgage payment down from 80% to 60%, that will leave plenty of wiggle room for your monthly expenses.
Mortgage insurance is also a must and you’ll need to save over 20% to use as a down payment. The bottom line is that you should start saving now. At VFCU, we have great savings accounts that allow you to stash away any amount you’d like to be used toward the purchase of a new home. The sooner you start, the better.
Take it Easy
Don’t feel rushed or pressured into buying your new home. If you’re renting and the lease is coming up, don’t feel pressured to sign on the dotted line. There are plenty of factors to consider, and if you make quick decisions on things such as location, price or neighborhoods, you might regret it later. Don’t be afraid to rent month-to-month either. The rent might be a little higher, but at least you’ll have peace of mind knowing that plenty of time is left to find the home you need.
An Emergency Fund
Additional expenses that come with a purchase usually startle many first-time homebuyers. Start making room in your monthly budget for things that might sprout up in the future, such as home repairs, outdoor lawn maintenance, a large electricity bill, etc. The rule of thumb is to have enough to cover at least six months’ worth of expenses. This will help blanket you from financial headaches that could possibly stem from a job loss, medical emergencies and other expenses. The sooner you start saving, the less of a financial mountain you’ll have to climb before you’re out of the red.
Don’t ever overlook things just because you’ve found the house of your dreams. This can cause you to face future financial strains down the road. Bring someone along who has no stake in your purchase, like a friend or family member. Since they’re not buying the property, they’ll be sure to give you a different and unbiased point of view. Different people will spot things you might end up overlooking.
Furniture Shopping Can Wait
Many first-time homebuyers sometimes underestimate the added expenses that a home can bring, like furniture shopping. Before doing this, think about what your new budget might look like. We know that the thought of furnishing your new home with the latest living or bedroom sets is tempting, but this will be an added payment you’ll have to make at the end of the month. Drive by furniture stores and do research on when they offer liquidation sales so that you can outfit your home affordably. Remember, this is to allow you to have something that makes living a bit easier. You can always purchase something nicer later.
We Want to Help
Getting to the final step of becoming a homeowner is a wonderful experience. At VFCU, we have many great financial services that can help you keep track and save for your future home. Call or visit our credit union in Brownsville today to start exploring your options of affording a future home.