5 tips to help save up for a house

In today’s market, it can be challenging to save up for a house. As housing prices keep increasing and supply has yet to catch up with demand, you might not know where the best place is to start your homeownership journey. We understand the market can be confusing and intimidating, but if you’re feeling a little lost, don’t panic! 

While everyone’s housing hunt will look different, there are some common tips buyers can follow to save up for a house. Here are five of our top suggestions to help you make the most out of your experience, with the least amount of stress.

#1 Understand your current situation

You can’t make any financial progress if you don’t know where you currently stand. You need to know how much you earn and spend every month, what you can afford to save, or if you can cut back anywhere. Take some time to examine your finances. What is your monthly income? What per cent of that goes towards living expenses like rent, utilities, internet, and car payments? It’s important to know what you’ll have left over after these essential costs, since these payments aren’t optional and you’ll be working with any extra balance. Once you have this number, you can start budgeting and working towards homeownership.

#2 Actively budget for a home

One of the biggest parts of saving for anything is actively planning and budgeting for it. You probably learned this when you were younger, and you were trying to save for a bicycle or a pet. The process was much more efficient when you stuck to a strategy of regularly adding money to your piggy bank, instead of throwing in a dollar here and there whenever you thought about it. The same goes for budgeting for a home. You need to incorporate this goal into your daily life so you can actively save for it. This might mean setting aside a certain amount of your income at the end of every month, or cutting out extra spending and using that money to save for your home. Treat your future house as the grown-up version of buying that bicycle!

#3 Be realistic

It’s easy to get lost in fantasies of buying the perfect home. It’s an exciting experience, after all! However, it’s important to be realistic when you want to save up for a house. Your income, budget, location, and housing requirements will have the greatest impacts on the type of home you can buy. You should have an idea on what you can afford and what you need before you start house hunting, for a couple of reasons. One, it will be a waste of your time and efforts to look at homes that don’t suit your budget. Time is valuable in a competitive market like this one. Two, you risk major disappointment if you fall in love with a home you can’t realistically afford. The home you buy now might not be your final house or your dream home, but it can be a stepping stone towards all of that. It’s okay to buy a home that you don’t see yourself in forever, as long as it still makes you happy and is a realistic option for you. 

#4 Take closing costs into account

Buyers often spend a lot of time and energy saving up for their down payment and mortgage costs when they save up for a house. Of course, those are the biggest costs you’ll face, but remember they aren’t the only ones. You will also need to handle a variety of closing costs, which will add up to a big chunk of money and require some budgeting themselves. Closing costs include things like legal fees, land transfer tax, moving fees, home inspections, and appraisals. These are all part of the home buying process, so you need to include them in your savings plan. You can read more about these costs and the importance of saving for them here. 

#5 Contact a broker now!

Finally, one of the best ways to save up for a house is to have a trusted mortgage professional on your side. A mortgage broker’s top priority is getting their clients the product and rate they need, which can save you a ton of money and stress with your mortgages. Going to a bank might mean you only have a couple of options for rates and products, but brokers hunt around and contact various lenders to find the best deal for you. With a wider net of contacts and a higher interest in your success, brokers can find you the perfect product. Apart from mortgage rates, brokers can also guide you through the process for budgeting and house hunting to ensure you’re taking the most money-wise approach.

Whether it’s your first home or your fifth, it can be tricky to save up for a house. The market is constantly changing, and getting a handle on this industry can feel overwhelming. If you need some extra help or advice, there’s no shame in that. In fact, there’s plenty of professionals ready to guide you! Our team can help you save up for a house that meets your needs, with the product that will serve you best.

If you’re interested in buying a house or refinancing your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.