Discover How to Save Money for a House

Saving money for a house can feel like an insurmountable goal. A down payment and closing costs will be in the thousands. For a traditional mortgage, the target number is 20 percent of the sale price for the down payment and another estimated 5 percent toward closing costs. If your dream home is $200,000, expect to need $50,000 saved.

It seems a bit daunting, doesn’t it? The Consumer Financial Protection Bureau reports, “People often put off saving for [important] goals because they feel like they don’t have enough money to save or they are busy struggling to make ends meet today. They feel like they can’t think or worry about saving for goals, large purchases, or even life events in the future. This can create financial challenges in the future.”

So, how do you start saving the tens of thousands of dollars needed for a home purchase? Here are our tips for saving money for a house.

Set a Goal: Decide how much money you need for the house you want, and set a date to achieve this goal. Moreover, ensure your goal is reasonable, It may take you five years to save $50,000.

Create a Plan: Convert your goal into yearly, monthly, and weekly financial targets. A $178.58 weekly goal is easier to achieve than the lump sum of $50,000.

Cut Spending: Reduce spending on as many items or services as you can. Cut back your cable television from the premium package to basic. Reduce your phone from unlimited calling to a fixed number of minutes. Limit the number of times you eat out.

Boost Savings: Take the money you have saved and invest it into a savings account, certificates of deposit, mutual funds, and savings bonds. Banks and credit unions offer financial products that are safe and boost the value of money saved.

Increase Income: Consider taking a part-time job. The added income will help you to save faster, and will help with other unexpected expenses like automobile repairs.

Revise Goals: If the amount you are saving for a home doesn’t make sense, or your life’s circumstances have changed, adjust your goals. Your goals are not etched in stone. Adjust them so they make sense for you and your family.

If you already saved money and plan on purchasing your first home, or just need more information, please contact us.


What is an Adjustable Rate Mortgage and What Are the Benefits?

If you’re trying to find a loan, especially to purchase real estate, you’ve probably heard of the adjustable rate mortgage. You may be wondering why it would be good for you, or maybe even what it is. Let’s answer a few of your questions here.

What is an adjustable rate mortgage?

An adjustable rate mortgage is actually almost as simple as it sounds. The bank will give you an initial interest rate for your loan, but as time goes on, this rate will probably change. Of course, it’s not just up to the banks to choose whatever mortgage rate they want. The rate will depend on one of several indexes, so the rate can go up or down. Most of these indexes are similar, so it doesn’t make much difference which one the bank chooses, but you should still find out which one your loan will follow and why the bank chose that one.

The benefits

Using an adjustable rate for your mortgage can be very helpful to you. For example, because the bank considers you to be taking the risk when you accept an adjustable rate loan, it will often give you a lower initial interest rate. An adjustable rate loan is great if you think that interest rates are likely to go down, or even stay about the same, over the course of the loan. It also might be a good choice if you don’t plan to hold onto the property for very long.

Are you considering an adjusted rate mortgage? Contact us. We’re experts and can help you with everything that you need.


FHA Mortgage

The Federal Housing Administration provides mortgage insurance on loans granted by FHA-approved lenders. A FHA mortgage insurance policy gives lenders protection against losses that result from homeowner default. The benefits of this type of loan are:

Lower Down Payment: FHA loans require a low down payment. You can deposit as little as 3.5 percent. A bonus is this allows you to start building equity sooner.

Lower Mortgage Insurance: The insurance fee is lower than the fee you would pay on a conventional mortgage. The overall monthly payment is also lower.

Better Interest Rate: FHA offers the same low-interest rate to all borrowers. If you qualify for a loan, you get the current rate and the guidelines do not require a minimum credit score.

Higher Seller Contribution: This type of loan has a higher allowable seller contribution and you can negotiate to have the seller pay most of the closing costs.

The FHA approval process involves the following 5 steps:

  • Pre-approval during which the lender reviews your financial circumstances.
  • A standard Loan Application also known as a Uniform Residential Loan Application. You must give them information about the type of loan you want and the property address.
  • A property Appraisal which involves having a licensed home appraiser determine the true market value of the property based on sales prices and the condition and unique features of the property.
  • An underwriting and documentation review that involves an analysis of your income, paperwork, and credit score.
  • FHA loan approval if the underwriter is satisfied you meet all of the lender’s guides and FHA guidelines.

A mortgage group can help you find the best possible home loan at the lowest interest rate available. For more information please contact us.


What is a mortgage broker and why work with one?

The home mortgage process is a complicated one. When you purchase a home, you don’t only have to worry about finding the right home, but you must deliver the best offer and get your mortgage lined out.

Likewise, the refinancing process is also complicated. Even though you aren’t buying a new home, you still must go through much of the same process. Luckily, there are some great options out there when it comes to those who will help you out with this process.

In either situation, most people will turn first to their bank. This is the location where they have developed a relationship and are comfortable with the environment. Plus, there is likely to be at least one mortgage loan processor to work with. However, there are some other options that you should consider in addition to your own bank.

One fantastic option is a mortgage broker. What is a mortgage broker and why work with one? They basically work in the middle of the buyer and the bank. Not only do they work with you to determine the best mortgage loan, but they will work with the bank to get you qualified.

One of the main values of a mortgage broker is the additional work that they do for the homebuyer. With any bank, there is a limited number of options available when it comes to the different types of loans that are available. However, with a mortgage broker, they will take your basic information and determine which loan will work best in your favor.

This is a process that is beneficial to both those who are looking to purchase a new home or to refinance the one that they already have. For example, most people who are refinancing their homes are looking for better loan rates. In order to find the best rate, it is important to compare the different options in your area. This is an extremely time-consuming process.

To complete this process, you would find that you would have to physically travel to every bank. For those refinancing, this is something that could make the entire loan process take longer. This would mean that you would need to continue accumulating fees and making payments towards your original loan. On the flip side, when you are looking to purchase a home, this could mean that closing is delayed, which could mean that you are not able to purchase the home of your choice.

If you are interested in purchasing or refinancing a home, a mortgage broker can help to make the process easier. To learn more about the services that we offer, be sure to contact us today.