Blog:
You’re in the buying mood but are you really prepared?
One of the things you should have been doing all along is SAVING for the down payment. Now, I’m not a financial planner and in no way should my money savings skills be considered the plan for your million dollar saving machine, but bear in mind that the reason the American economy took a deep dive back in 2008 – 2009 is because many Americans were ill prepared for their monthly expenses.
Let’s have some honest conversation.
Please, please, please – and I say it again, please … take the time to consider first that you need to be putting aside money for your future golden years. There are plenty of wise stewards in our midst who are well equipped to give sound advice on saving for the future.
Funds for fun and dreams!
Once your pocketbook is accustomed to the regular deposit into the Golden fund, then you can consider making a concerted effort to put aside money every paycheck to two funds for yourself. We've called those two funds the “Dream Home Fund” and recreation. You’ve probably already guessed by those simple titles exactly what they were for! Whether you use the old-fashioned envelopes or two separate savings accounts it doesn't really matter, just don’t neglect the fact that you NEED to put aside money to get where you want to be.
Your Dream Home Fund:
Most mortgage lenders require a minimum of 5% of the sales price as a down payment. So, on a home costing $100,000 you would need a minimum of $5,000 to put down as your interest deposit. Additionally, there are closing costs which are required to be paid at the time you take possession of the home and close on the mortgage loan. Those costs can be another 7 - 10% of the purchase price. So, you're looking at needing about $15,000 or thereabout to purchase the $100,000 home.
Yes, this DOES seem like a very large amount of money to have to come up with – but don’t get discouraged. If you haven’t been saving, START NOW. It won’t take long if you give up that take-out dinner or start bringing your lunch to work. Put that money away for the “Dream Home Fund.” Pretty soon you will be so used to saving that you will have that down payment!
If you’re ready to start the journey toward Homeownership now, you have two choices: wait for next week’s blog to get tips on starting down the road or just click on this link and get a copy of the instantly downloadable e-book Home Sweet Home – Help for the First-time Homebuyer. There are tips and tools to give you confidence in the home buying process whether you’re a single individual or have a partner for share the finances. Believe me, you’ll be glad you did!