It’s often said that a home purchase is the single largest purchase a person will make in their life. That’s probably why it’s so common for prospective homebuyers to feel overwhelmed by the idea of finding a home they love they can afford, let alone figuring out how to save for the down payment!
If buying a new home in the Bay Area is in your future, preparing now is a smartest thing you can do. Here are three things you can do right now that will get you started down the right path towards homeownership.
Set a Clear Goal
The most important step you can take is write down a clear, well-defined goal. Saying you want to buy a house someday isn’t enough. Instead, you need a well-defined goal. Think about the kind of home you want, whether you want to purchase a new construction home or an existing home, the neighborhood you’d like to live in, the number of bedrooms, and features you’d love to have.
Remember: this may ultimately change once you begin house hunting, but it’s helpful to start with a specific idea in mind.37
Create a Savings Plan
Now that you have clear picture of the type of home you want to own, you can get an idea of how much it may cost and develop a savings plan. Review your current budget and expenses and determine how much you can set aside each month. And try to identify areas you can cut back on or adjust your spending. The key here is to create a realistic savings plan you feel capable of keeping. Don’t feel like you need to strip your budget to its barest bones in order to afford a home. Find the right balance between saving for your future home while still being able to enjoy life today.
Create a separate savings or money market account to stash your down payment cash. Separating your money will reduce the likelihood you’ll dip into your savings to cover something else. Make saving even easier by setting up automatic deposits each month.
When saving a home purchase, you’ll also want to keep in mind additional costs like closing costs, home inspections, home insurance and any other fees.
Research Your Financing Options
There are plenty of mortgage options available for prospective homebuyers and its important to know that not all mortgages or loans are created equally. Each type has its own benefits. Now is a great time to research available financing options to see what may be available to you. In addition to conventional loans, here are a few common financial assistance programs to look into if you don’t qualify for a conventional mortgage:
- FHA loans: FHA loans are especially common with first-time homebuyers because they’re typically easier to qualify for than conventional loans and require a smaller down payment.
- VA loans: this loan is offered through the Department of Veterans Affairs for all veterans and active service members and their spouses.
These aren’t your only options. Many states also provide homebuying assistance programs for first-time buyers.
These three simple tips will help you get started on your goal of homeownership. With careful planning, you’ll be able to make buying a new home feel more achievable.
When you’re ready to start looking for homes, visit us online at SummerHillHomes.com to learn about our new home communities throughout the Bay Area.