Buying a home is a huge responsibility with an enormous advantage in return. A potential buyer will have to set and have patience on reaching the goal of purchasing a house. Knowing what you can afford is essential to being a successful homeowner. Once you understand what you are bringing in and determine where your money is going, you can begin to accumulate the needed funds for owning a home. If you are burdened by debt together we can determine what is the best way for you to bring that debt down. With some discipline and creative strategies you can probably come with more money than you think.

                First you need to check your current finances and investigate ways to save and raise the extra funds. Here are a few suggested steps on how to do that:

1. Write down your current monthly income. Before you can decide where you are going, you need to know where you are. A general rule of thumb, your monthly mortgage payment shouldn't exceed 28 percent of your household's gross monthly income.  
2. Estimate your monthly withholdings. Check to see if you can change your tax withholding to a higher deduction. Your take home pay will increase, giving you more funds to save towards a down payment. 
3. Estimate your current fixed expenses. Your fixed expenses are those items that don't vary much (i.e. rent, insurance, savings, debts, child support, etc.) If you have a lot of high-interest credit card debt try to move your balances to cheaper cards and plan to spend a year paying off as much of that debt as possible. 
4. Estimate your current flexible living expenses. Determine where your extra money is going and this will help you understand where you need to cut down or out and save money.  
5. Identify your long-term financial goals. Owning a house may be one, saving for retirement or college tuition may be another.  
6. Open a savings account for purchasing a house. Commit to a minimum amount every pay period even if it is $20. Set up this amount for automatic withdrawal through your company's payroll. Strive to save enough to put 20 percent down as your down payment. If you put down less than 20 percent many lenders require buyers to have private mortgage insurance (this will add to your monthly mortgage payment). In addition to needing a down payment, closing costs (title insurance and mortgage fees) also need to be accounted for. 
7. Look for other sources of funds. For instance, if you have a Roth Individual Retirement Account (IRA) and are a first-time homebuyer, you have access to $10,000 of these funds penalty-free under certain conditions. Talk to an accountant regarding the pros and cons of taking a loan out or withdrawing funds from your account.  
8. According to  a recent survey from the National Association of Realtors, nearly 23 percent of first-time homebuyers receive gifts from relatives and friends.  
9. Ask your Lender about down-payment assistance programs for first-time homebuyers offered by banks, local governments and charities.  
10. Clean your credit. Your credit history determines the loan terms and mortgage rates you qualify for. Consider paying down debt and disputing any errors. You can get a free credit report at http://www.annualcreditreport.com/.  

Our commitment as your Realtor is to help you become a successful homeowner. I stress homeownership because if you continue the discipline of the savings suggested it would add to the success of not only buying the home but also maintaining it. Remember, once you own the home each day you live in it, it potentially builds up your equity and the better you improve or maintain the condition of the house the more equity you will have. This all adds up to your net worth!

 

Your Mother & Daughter Realty Team!

"We take the extra steps to ensure our clients receive the utmost care"