The Real Estate Cupboard ADM#103 Archives by Steve Hubbard, Certified Buyer’s Representative

Saving for Your First Home

A young couple thinking about buying a home in the near future plans to first move into a home owned by the young man’s grandfather where he will allow them to live for free in order to help them raise money to put
toward their purchase.

Though not every young couple considering buying a home is blessed with such a generous grandfather or anyone who is willing and able to provide that kind of help, there are 2 things everyone can do to help themselves along the way toward home ownership. The first is to stay away from credit card debt and the second is to save whatever one can over time. Credit card debt resulting from the purchase of things that get used up or for one reason or another will need to be replaced is in my view significantly detrimental to financial strength, wealth building generally and home buying specifically.

So if you are considering buying a home in the future and can’t resist using your credit cards, get rid of them. A savings method I can recommend that just about anyone can do that will yield amazing result if followed religiously over time is the following: No matter how much or how little money comes in every day, week or month take some small percentage of it, say, 5%, for example, or even less if that’s too much and put it where it is not so easy to get to. And most important, never look at the balance. Forget about it once its put away. The reason this is such a helpful feature of this savings plan is that if you don’t know how much you have, you can’t compare the amount to purchases you might like to make but perhaps don’t need to. If you don’t know how much you have, there is no way for you to know if you have enough to make the purchase.

These are the first things to do when anticipating buying a home some time in the future. And, of course, the longer one gives oneself and the more diligent and dedicated to the project, the better off one will be. While engaged in this preparatory process one can also begin to look at homes for sale. When you finally make a purchase, the homes from which you can choose may be different but at least you will have had the opportunity to identify your likes and dislikes and to let your ideas evolve so that when you are ready, you will make the best possible decision about what to buy. Talking with Realtors is a good way to do this.

There is another good reason to talk with Realtors. You can be sizing them up as to their potential as your buyer’s Agent. So that when you are really ready to get deeper into the buying process and actually make a purchase, you will have a number of Realtors with whom you have talked to choose from to help you. It would also be helpful to talk with potential lenders and mortgage brokers from time to time in order to help you learn what it’s going to take to get you into, if not the house of your dreams, at least a home you find satisfactory. You can talk with lenders and brokers about your credit score and about how to improve it. You can talk with them about different borrowing options, down payment amounts, closing costs associated with borrowing, seller’s concessions and so on.

It’s clear there is lots to do if buying a home some time in the future is what you have in mind before you even begin to get serious. So there is no better time to begin getting ready than right now, it seems to me.

Steve Hubbard owns and operates Steve Hubbard Real Estate Services.
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