Cove Real Estate



Posted by Cove Real Estate on 12/1/2017

One of the first and most important things that you should do when you buy a home is to be sure that youíre on top of your finances. Before you even begin the home search, youíll need to be sure that you have money in the bank and know your credit score. What you really need is a plan. 


Set Up A Savings Account For Your Future Home


Having a separate account set up just to help you save for your down payment and other home costs can be very helpful. Find a bank with a bit of a higher interest rate. Often, online banks are your best bet. If youíre able, set up automatic transfers from one account to another for a set amount each month. Youíll be saving before you know it! 


Set Goals


If you have no idea of what you want, it will be difficult to understand what you need to do to get there. Typically, itís a good idea to have 20% of a homeís purchase price saved for your down payment. Putting 20% down also helps you to avoid the additional cost of PMI, also known as private mortgage insurance. Once you have a goal, donít look at the big picture. Break down your big goal for savings into smaller bits to make it less overwhelming. 


Make Savings Automatic


Weíve already mentioned the idea of setting up an automatic transfer, but you can do even more. When you are gifted money, instead of spending it, put it in your home savings account. If you get a bonus from work, save it. If you get a raise, live off of your previous income and use the additional income for savings. All of these little actions add up fast. When you make savings habit, itís easier to reach your goals. 


See Where You Can Cut Costs


Thereís probably plenty of places that you can cut costs in your budget. Sit down and see how much your expenses actually are compared to how much you actually do spend. Can you opt out of cable TV? Maybe you can reduce the speed of your internet connection, or find a cheaper cell phone plan. If you take a close look at your expenses, thereís probably plenty of ways for you to  cut back and save.


Sell Your Stuff


Weíre not talking about selling your essentials, but if you have things around your home that youíre not using, thereís a better use for them. You can probably get some extra cash for these items by selling them. Itís so simple to sell things on the Internet these days that you can make some money and get rid of unwanted things pretty easily.  


Focus

With a bit of focus, hard work and diligence, you can save up enough money for a down payment on a home. Donít forget to keep all of the other aspects of your financial life in order such as paying your bills on time and not opening new credit accounts. Good luck with your savings goals!