Our blog this week was written by Mark Palmer from Absolute Mortgage. To find out more about Mark and his approach, click here.
5 Tips to Save Green to Purchase a New Home!
It is officially springtime, but the Seattle housing market is already HOT! With rental costs increasing and your ability to rent inexpensively near your workplace declining, it may be time to invest in your first home. Worried you can’t afford a home in this market? Saving your green may be easier than you think! Here are five easy tips to help you save money for your new home:
- There’s an App for That. Owning a home is a rewarding endeavor, however there are multiple factors to consider before you figure out the amount you’ll need in savings. These include home location, taxes, Mortgage Insurance, closing costs, down payment, appraisal fees, required earnest money, etc. Your Realtor with Team Troy will be able to help you find a great location based on your needs, and from there it will help to decide how much money you need to save. Next download a budgeting app. There are multiple app options that will help you to achieve your money saving goals. Click here for a few ideas!
- Make Incremental Adjustments. Making small changes to your daily life can help you find some extra money in your savings. Things to look at: reduce your thermostat while you’re away at work. Pay for basic cable or Hulu instead of a large satellite subscription. Limit those drinks at happy hour. Work remotely one day a week. Buy the store brand, instead of the International Delight creamer.
- Avoid BIG Purchases. We all know what is considered a big purchase for our income… When purchasing a home your ideal debt-to-income ratio will be under 43%. Take a look at your debt (car loans, student loans, credit card debt, etc.), there may be ways to reduce it. Not only are you “saving” money by reducing your payments with double-digit interest rates, you are also reducing your debt-to-income ratio!
- Consider Gift Options. Money for your down payment can come from a source you may not have considered; gift funds! This is money that is given to you with no strings attached (i.e. you are not expected to pay the money back). Parents or grandparents may be open to this as it helps you achieve one of your dreams – give them a call.
- Save Your Tax Refunds! It’s tax season – you should be receiving your refund shortly (if you receive one). Instead of viewing this as extra income, stash it away. You’ve technically already spent it so just pretend it’s not there. Use this money towards your down payment instead!
Bonus! Consider your home loan program. This can greatly affect the amount of money required to purchase your new home. FHA, Conventional, ARM, Grant or DPA, etc. Find the program that will help you to achieve your current needs. Your lender will be able to assist you in answering most of these questions. If you don’t have a lender already setup, give the Mark Palmer Group a call at 425-225-2850 or email us at team@markpalmergroup.com.