Saving Tips When Saving For A Mortgage

by Guest on December 6, 2012

Purchasing a home is one of the largest milestones that many could make in their life. Having the money for down payment, closing costs and other incidentals can seem daunting when looking at the total amount of money. With a few tips and tricks, saving for a home purchase can be done. With patience and savvy saving, one will soon be able to own their own home.

The first thing one should do when considering buying a home in the future is to look at their current income. This is best done with a real estate agent or your bank loan officer. They will sit down with you and look at all your income sources. This will help to determine not only what type of mortgage is best for you but also how much you will need to save. They will also look at your credit score. The better the credit score, the lower the interest rate on a mortgage. If your credit score is less than favorable they can help advise you on steps to take to improve your credit score.

With your real estate agent or bank loan officer, they will talk about 20%. This percentage is how much you need realistically to put down on your future mortgage. While many homeowners do buy a house without having this large of a down payment, it hurts them in the long run. If you do not have 20% of your down payment when purchasing a home, you will have to buy private mortgage insurance. This will have to be paid in addition to your mortgage payment each month. That can add up quickly over time.

Once you understand how much you will need to purchase a home, you can plan. Having a monthly budget is the best way to do this. Take a close look at all of your expenditures, are there things you can cut out? Remember that by tightening your belt for a little while, will help you get into your home quicker. Many will take their future estimated monthly mortgage payment and put that amount in savings each month.

Speaking of savings, don’t forget to have that money make more money. For most people, it takes a few years to save up for a mortgage. It is best to put your savings into an interest bearing account. Your bank officer can help you find the best one for you. It also helps to not tempt you into spending your savings. These interest bearing accounts can add up quickly over time, helping you get closer to your goal.

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