Down Payment For Your First Home In Oakland County Michigan

Down Payment For Your First Home In Oakland County Michigan

So you’ve decided to purchase your first home in Oakland County, Michigan. Congratulations! Purchasing a home is a huge decision, and it can be one of the most exciting and rewarding experiences of your life, but getting the down payment can be tricky and challenging.

But purchasing a home requires capital, and if your savings account is looking a little trim, it means that you will have to do some budgeting in the upcoming year to make your dream of being a homeowner a reality and having that elusive down payment.

Here are 7 budgeting tips to help you buy your first home and save for your down payment.

1. Start Tracking Everything You Spend

You will not be able to make any major changes to your budget if you don’t have a firm understanding of how your money is being spent. Tracking everything you spend for a month will show you exactly how much you’re spending, where you’re spending it, how much of your budget is going towards necessities and how much of your budget is going towards luxuries items and what could possibly be going towards your down payment for a new home.

You can keep track of all of your expenses in a spreadsheet, but a better strategy is to use an app like spending tracker like Mint or Prosper Daily (formerly BillGuard). These apps link to all of your accounts and will track and categorize your spending, making it easy to visualize where your money is going.

2. Identify Areas To Cut Back On

Once you know where your money is going, it’s time to identify the areas where you can cut back and save additional funds to put towards your down payment. Every household will be different, but when you’re saving for a house, anything that’s not a necessity (like rent or medical insurance) should be considered an area where you can cut back and start saving for your down payment.

Things like eating out, daily Starbucks and an expensive gym membership are great, but they can quickly eat into your budget. Cutting back on extra spending is a great way to build your savings and get you into your new home faster.

3. Create A Budget Which Includes Money For Your Down Payment

Creating a budget – and sticking to it – is one of the best things you can do for your finances as you’re gearing up to buy your first home and down payment. There’s nothing more frustrating than having a savings goal and consistently falling short each month because of thoughtless spending. Having a firm budget (and holding everyone in your household accountable to it) helps you stay on track towards your savings goal.

Create a budget that includes all of your set expenses (like rent), the amount of money you will put into your savings account each month and allowances for categories like food, entertainment and gas. Then, stick to the budget no matter what.

Having a set amount for how much you can spend on things will make you think twice before pulling out your wallet.

4. Get Your Credit Score Up

One of the most important factors in the home buying process is your credit score. Your credit score (and the credit score of your spouse, partner or co-buyer) will directly affect the interest rates on your mortgage, and a good credit score can save you thousands of dollars a month and assist in a lower down payment for your first home in Oakland County Michigan.

If you can, work to bring up your credit score as much as possible before you apply for your mortgage. Pay down any outstanding credit card debt, check your credit report for inconsistencies and always pay your bills on time.

5. Practice Paying Your Mortgage

When you create your budget, you should have an idea of how much you can afford to spend on your mortgage payment when you buy a home in Oakland County Michigan. But you shouldn’t wait to buy a home to start making that payment, particularly if it’s higher than what you’re currently paying in rent.

Practicing your mortgage payment will give you real life experience of what it will be like to make that payment each month. Take the difference between your current rent payment and your projected mortgage payment and immediately put it into savings at the beginning of the month.

You might find that you overshot how much you can afford and your projected mortgage payment puts you under too much financial strain. Or you might find that you actually have more wiggle room in your budget than you anticipated and can afford a higher mortgage. Either way, that’s information you want to know before you lock in a 15 or 30 year payment.

6. Pay With Cash

It’s easy to lose track of how much money you’re spending when you put everything on a debit or credit card. With just a quick swipe, you have everything you need. But paying for things in cash can make the purchase feel more real and can help you get a better handle on your spending.

At the beginning of the week, take out all of your spending money in cash. Then, make a commitment to only use the cash in your wallet to cover your expenses. If you run out of cash, that’s it.

Seeing your cash dwindle as the week goes on will help you visualize how much money you have left for the week and can help curb needless spending to allow for down payment saving.

7. Reward Yourself Regulatory

There’s no way around it – saving money for a down payment is tough. It’s important that you reward yourself for your successes and for moving towards your savings goals.

Set milestones for your savings goals (like saving $1000 or paying off an outstanding credit card balance), and treat yourself when you hit that goal. The reward will give incentive to keep going when things get challenging.

One trap you’ll want to avoid is rewarding yourself with something large, extravagant and expensive. Rewarding yourself for saving money by spending money isn’t a recipe for success! Your reward should be something low cost (or free) that still feels like an indulgence, like a picnic day at the park with your family.

With these tips, you’ll be well on your way to signing those closing papers, getting your keys and making a new life in your first Oakland County Michigan home.

I’m here to help you find the perfect Oakland County, Michigan home, once your ready and have your down payment saved. Give me a call 248-790-5594 or email me @ [email protected]

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Buying Your Farmington Hills Home-How Much To Borrow

Buying Your Farmington Hills Home-How Much To Borrow

The “rule of thumb” regarding loans is that your monthly housing payment such as the taxes, bills, insurance, mortgage, etc., should not be more than 28% of your income that you receive every month. When it comes to FHA loans, the balance of ration might be higher. The question that remains is, “How much do I need to borrow when buying your Farmington Hills Home?”

Here’s what you should focus on: it all comes down to “down payment”. The higher the amount you have saved, the easier it will be to get a mortgage loan for your Farmington Hills home.

Confused?

Let’s clear this up for you. Following is some pertinent information that all homebuyers should know about before buying your Farmington Hills home:

Counting Your Savings

As said earlier, down payment plays the biggest role in the home buying process. If you have 20% down payment saved up, then you don’t have to worry about private mortgage insurance. Let’s say that you saved around $20,000 for the down payment. If  the home in Farmington Hills, costs $100,000, then you are building equity from the start. However, if the asking price is higher than this, then you will be charged a PMI anywhere between 0.25% and 2%.

All in all, you will be borrowing less if you have the 20% down payment or more. Moreover, the lender will be more open to giving you a loan and at a low interest rate when buying your Farmington Hills home.

Debt

When calculating the monthly payments, factor in your debts too. Aim for a house that will cost you less than 28% of the monthly income. This is because you will be paying down your debts, and any missed payment might result in a penalty

 Kinds of Houses Are You Looking For In Farmington Hills?

What are your future plans?

Do you see yourself having a family?

How many kids do you plan to have?

What are your aspirations regarding your job in Farmington Hills?

How is your lifestyle?

Questions like these give you a clear perspective of what kind of house you should buy in Farmington Hills. The price of the house increases depending on the neighborhood and the facilities offered within the community. The number of rooms, backyard, driveway and garage also play a role in the price range. Set a margin and tell your real estate agent to stick to it. Be realistic about your needs.

Be Mindful When Borrowing

Don’t bite more than you can chew! Financial stress is the worst and can quickly lead to depression. So, look for a house in Farmington Hills that falls under your budget and amounts to monthly payments you can easily pay.

Now you understand why it is so important to assess your financial situation before making this move. Look for a house that you think you can spend the next 10 to 20 years in. Changing houses within the span of 5 years will financially bankrupt you. If you want to buy a home for sale in Oakland County, Michigan, that falls under your budget and has all the features you need, then visit Homes2MoveYou.

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Crowdfunding For Home Purchases – A Futuristic Reality

Crowdfunding For Home Purchases – A Futuristic Reality

When looking to purchase a home in Oakland County, Michigan for the first time can be a difficult proposition and for for many potential buyers, one of the biggest obstacles on the road to homeownership is saving for a down payment. But thanks to a new technology trend, some savvy buyers are turning to their friends, family, and social networks for help in their home purchase these days, and it seems to be a trend that is spreading across the country. It is clear that technology and social networking can be a great way to stay tuned socially and in business, but now it has gone to a whole new level with CrowdFunding to help wanna be homebuyers reach their down payment goals by reaching out socially for assistance.

The CrowdFunding Trends

While crowdfunding has long been a popular trend, until recently it’s been mostly limited to the business world, but this is now changing to the private sector as well. According to a recent article in The Wall Street Journal, crwdfunding for home purchases is on the rise. There’s even a crowdfunding platform specifically for homeowners. HomeFundMe is the first  platform specifically targeted to potential homeowners looking to fund a down payment. Potential homeowners are given 12 months to reach their down payment goal, and all funds are wired from an escrow account to the seller when buyers make their property purchase.
HomeFundMe is still new (the platform launched in October 2017), but results so far are promising; according to the WSJ article, approximately 400 potential homebuyers have used the service to help crowdfund their home purchase down payments since the launch.

The Takeaway

If you’ve been thinking about buying a home but haven’t been able to save for a down payment, crowdfunding could be a way to make your dreams of owning a home a reality.

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Your First Home-What To Look For

Your First Home-What To Look For

When you’re buying your first home, there’s so many things to consider: you need to secure a home loan, find a realtor, decide on an area… the process can be a bit overwhelming.
And as someone new to the home purchasing process, it can be challenging to know exactly what to look for in a home. What kind of criteria should you be judging potential homes against?
Here are 4 things you should look for when you’re buying your first home:

1. A House You Can Grow Into

Purchasing is not like renting. When you rent, if your home no longer meets your needs, when your lease is up you can just pick up and move. But with homeownership, ideally you want to stay in your home long enough for the property to appreciate in value, which is at least 3 to 5 years. So it’s important that you not only consider how well a home fits your current needs, but also how well it will fit your future needs. You want a house you can grow into.
Think about where you plan to be a year from now, two years from now, five years from now. Are you planning on expanding your family? If so, you’ll want to look for a house with enough space to accommodate your growing brood. Thinking about getting a big dog that needs lots of exercise? You’ll want to have a backyard so they have plenty of room to run and play. Are your parents close to retirement, and would you like to have them come and live with you? Then a home with an in-law suite would be a great fit.
When purchasing a home, don’t just look at how well it might work today. Think of how well it will work for all your tomorrows.

2. A Solid School System

When you’re buying a home, one of the first things you should look at is the school system. Is it highly rated? Is it a place that people want to send their kids? Is your new neighborhood invested in education?
Even if you’re not a parent yourself, the school system in your neighborhood should play a huge role in deciding whether a property is right for you. A good school system can increase the value of your home and will appeal to a wider audience (i.e. – parents with children) if and when you decide to sell. On the other hand, a poor school system can slow the appreciation or even devalue your home.
Bottom line: whether you have children or not, investigate your new neighborhood’s school system before you make a purchase.

3. The Right Neighborhood Fit

Buying a home is a commitment, and when you buy, you’re not only committing to your home. You’re also committing to your neighborhood. And as such, you want to make sure that the neighborhood you buy in is the right match for you and your lifestyle.
For example, if you don’t own a car (and have no desire to own a car), you’re going to want to purchase a home in a neighborhood where you can easily access restaurants, shops, and other needs on foot or bike. If you’re obsessed with the outdoors, you probably want to look in a more nature-centric neighborhood instead of the city center. If you have a family, you’ll want to look for a neighborhood with other families so your children have ample opportunities for recreation and to make new friends.

4. Your First Home At The Right Price

When you’re buying your first home, the last thing you want to do is saddle yourself with a mortgage payment you can’t afford. That’s why it’s important to be realistic about your budget and then find a home that has a price tag you can comfortably afford.
Many first time homeowners get so excited about a property that they’ll stretch their budget in order to get into their “dream home.” But when you buy a house that’s outside of your budget (and outside of the price range you can afford), you’re setting yourself up for major financial stress, which isn’t a great way to start off your new life as a homeowner.
Before you start looking at homes, sit down and create a budget and be realistic about what you can afford to pay every month. Then, even if you get approved for a higher amount, stick to that budget. There’s all sorts of unexpected expenses that come along with homeownership, like broken appliances and surprise repairs, and if you’re funneling all your extra cash into a too-high mortgage payment, you won’t have the resources to deal with those situations as they arise.
Buying your first home is one of the most exciting times in a person’s life. Enjoy the process, take these 4 areas into consideration, and you’ll find the house that’s right for you – and your life – in no time.

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