It’s not a high wire balancing act, but now more than ever it’s important to save for a home of your own. Home prices and mortgage rates are on the rise. There will always be peaks and valleys but there’s no turning back. Here’s 5 tips that can help you from overextending yourself and keep your budget balanced and on track when purchasing a new home.
1. Track your spending
Before you can set a budget, you need to be honest about what you’re spending every month and what you’re spending it on. This means digging into your credit card statements, lining up bill payments and those out of pocket expenses that you don’t really think about. Your morning skinny peppermint mocha could be adding up to $150.00 per month.
2. Establish a budget
After you have a better idea of where your money is going, it’s time to set a budget. To be honest no one likes setting and sticking to a budget. But if you want to keep your finances on track, you have to decide what you’re willing to give up so you can set aside money for a down payment, home improvements, or closing costs.
A cool trick about saving I learned a while back is to make “pre-mortgage” payments. Basically, you just head over to a basic mortgage calculator and figure out how much your monthly mortgage might be for the new house you’re dreaming about. From there, deposit that amount into your savings account (minus your current mortgage or rent amount). You’ll quickly find out if your new mortgage amount is feasible and, if it works, Bonus! You’ll be saving money in the process.
4. Optimize your credit score
You can get a free copy of your credit report every year, or some banks provide it as part of your banking services. On your report, you’ll find your payment history, how much credit you’re using compared to what you have available, your credit history, and more. Look through the report carefully and make sure it’s accurate, if it isn’t contact the provider and find out how to fix it. Talk to a Mortgage Broker, he/she can tell you exactly what you need to do to increase your score. A higher score means a better mortgage rate.
One of the best ways to reach your financial and savings goals is to automate as much as possible. You can easily set up automatic transfers to move money from checking to savings after you get paid (or set your direct deposit to split it before it even gets to your bank). And once you do, there are tons of apps that will track your spending, budget, and goals automatically!
If you’re thinking about making a move (or know someone who is) I’m only a text, call, or email away!
Be sure to check out my free local Facebook Group, Meet Me In Oakville. It’s a great place to connect with other community members and get weekly updates on the best events and happenings in and around town!
Ready to buy a home? I have some recommendations for great lenders. Just send me an email at firstname.lastname@example.org or call or text me at 905-399-7229. No pressure, no sales tactics, just the help and guidance that you need