Home-Buying 101: Strategies for Saving for Your New Home
The prospect of buying your first home is exciting—but when you sit down and think about how much money you need to save for a down payment, closing costs, and other moving expenses, it can feel a bit daunting.
Fortunately, finding ways to save and budget for your first home doesn't have to be a guessing game. You can follow a few practical tips and tricks to take the stress out of saving for and moving to your first home.
Know How Much You Need to Save
Start by getting a better idea of how much money you'll need to save. Typically, the most significant costs associated with purchasing your first home are:
- closing costs
- down payment
- moving expenses
While exact costs for these things will vary based on your home's final sale price, saving between 2% and 5% of your total loan amount for closing costs and about 15% for a down payment is generally a good idea. However, depending on the home loan you're getting, you could pay as little as a 3% or even 0% down payment.
Create (And Stick To) a Budget
Once you know how much money you need to save for your first home, it's time to create a realistic budget. While creating a budget might seem daunting, it doesn't have to be. Simply tally up your total monthly income and average monthly expenses.
From there, subtract your monthly expenses from your income and see what you're left with. Decide on what leftover money to allocate towards your first home purchase. This will give you a better idea of how long it might take you to save for your house.
Get Creative With Ways to Save More
If your budget doesn't leave much leftover money to set aside each month, some creative ways exist to cut expenses and bring in more money.
Start by looking more closely at your current monthly expenses. Are there areas where you're spending more than you need to? It may be time to start eating at home more often instead of ordering takeout a few days per week, or you may have monthly subscription services you don't need or use.
You might also explore creative ways to bring in more money. Consider, for example, decluttering your current place and selling items that you no longer need. This will serve a dual purpose of cutting down on clutter before your move and helping you add more money to your home-buying fund.
Consider a side hustle to bring in more money. With anything from tech service setup to freelancing, a side job for extra cash can be an option.
Don't Forget to Budget for Movers
As you save money to buy your first home, it's essential to focus on the significant expenses—like down payments and closing costs. However, you won't want to overlook general moving expenses, like the costs of hiring a team of professional movers. With some shopping around, you can make the most of your moving budget and still get the valuable moving help you need to take the stress out of your big day!
Contact us today for a free quote.
