Top Ways to Save for the Down Payment of Your First Home
Are you ready to buy your first home? Want to make sure you have enough for a down payment? There are advantages to making a down payment on your first home. You can secure a lower interest rate on your mortgage as well as a lower monthly payment. But it may seem daunting to try to save up that much money. Before you start looking at any Greensboro houses for sale, consider the top ways to save for a down payment on your first home.
Start an Automated Savings Plan
Most potential home buyers find it easiest to save by having an automated savings plan in place. Typically, this involves having your financial institution automatically withdraw a portion of your direct deposit paycheck and put it in a designated savings account. It is wise to have a separate savings account that is designated only for saving for your down payment. If you are not paid by direct deposit you can set up an automatic transfer on certain days of the month to transfer funds to your designated down payment savings account. When the money gets moved automatically, it keeps you from forgetting and the money is put away before you can spend it.
Open a High-interest Savings Account or Investment Account
By putting your savings into an account that yields higher dividends, you will reach your savings goal faster. Interest-earning money market accounts and certificates of deposit (CDs) earn more interest than a basic savings account. Another option is to invest your savings in a conservative type of stock or set of mutual funds. Speak to your financial advisor about this before proceeding to make sure you are investing wisely.
Use Your IRA (Individual Retirement Account) for Your Down Payment
It is possible to use the funds in your IRA as a down payment for a home. But it is important to understand the tax implications of this decision. A traditional IRA is subject to federal and state income tax when you make a withdrawal before the age of 59½ because the funds went into the account pre-tax. A Roth IRA is not subject to taxes because the funds were placed in the account after being taxed. It is also important to understand that taking funds from your retirement account may affect your future retirement security. Speak with your financial or tax advisor before proceeding.
Real Estate Agents in Greensboro Can Help Before and After You Save
Before you make any immediate plans to buy your first home, you need to find out how much you will need to save. Meet with your real estate to get an idea of how much the home you want to build will cost, taking a few years of inflation into consideration. Once you have saved your down payment, meet with your real estate agent to begin viewing Greensboro houses for sale. Smith Marketing of Allen Tate Realtors® will work with you every step of the way to help you realize your dreams of owning your own home. Call (336) 451-4921 or (336) 663-1320 to set up a free consultation today.
Top Reasons to Downsize Your Home
Many of us spend our lives moving from a smaller home to bigger and bigger homes as our families grow and our lives change. But when it comes to homes, bigger is not always better. There are some true advantages to downsizing your home, and some may surprise you. If you’re thinking of downsizing or maybe moving to one of the maintenance free communities in Greensboro, NC, look for the best real estate agents who will make sure you get the most for your money.
Downsizing to a Smaller Home has Major Benefits:
Lower monthly mortgage payment. Smaller house, smaller payment. A huge home may seem like a great idea at first, but once you start making those payments you may find that the financial burden is too much to bear.
Lower monthly utility bills. Less square feet of home means less area to heat, cool, and light. Lower energy bills can make a big difference in your monthly budget, leaving you more money for other things.
Less maintenance required. The bigger your home, the more maintenance and upkeep it will need. Cleaning, yard work, and other chores add up and take up a lot of your spare time. It may be too much for your family to handle alone, which leads to hiring costly help.
Pay off your mortgage faster. Interest accrues daily on most home loans, meaning the faster you pay it off, the less total interest you will end up paying. Lenders don’t like this, which means it’s great for the borrower.
Pay off debt faster. If you have other debt besides your home, such as student loans, credit cards, or car payments, you will have more money left over to pay on these loans. Paying these off faster, especially high rate credit cards, will save you the most money in the long run.
Have more spending money. You’ve heard the term “house poor” before. It means you put too much of your household income into your home, leaving you without much left for enjoyment. If you buy a home that’s above your means, you better like it a lot because you’ll be spending most of your time there.
Unburden yourself from too much “stuff.” Like most people, you are likely holding onto possessions that are not crucial to your well-being. In fact, it may even negatively impact your mental and emotional health. Let go of the things you don’t need. Once you feel the weight that is lifted by selling or donating things you rarely use, you’ll understand. Your home is meant for living, not storage.
Find the Right Sized Home for Your Lifestyle in Greensboro
If you’re tired of paying too much for your home or wish to simplify your home’s upkeep, consider downsizing or moving to one of the maintenance free communities in Greensboro, NC. You can find an existing property or have a custom home designed and built that still includes all the luxuries and quality craftsmanship you desire. Enjoy your dream home and your life outside your home as well. Contact Smith Marketing of Allen Tate Realtors® at (336) 451-4921 or (336) 663-1320.