Buying a home is one of the biggest financial decisions that you can make. It takes plenty of time, consideration, and preparation. That last part is key. You may not be considering buying a home in the next year, but you still need to lay the groundwork for this decision. Saving for a home down payment early will help you move forward on your own timeline. It can be incredibly frustrating when you decide you’re ready to buy a home but you realize your finances aren’t on the same timeline. Not every road to homeownership is the same, but here are some tips as you start saving for this landmark purchase.
Consider Your Homeownership Needs and Start Scouting the Market
You can’t know exactly how much your ideal home in your ideal neighborhood will cost, but you can do some preliminary research to give yourself an estimate. Think about what kind of home you’ll need to buy. How many bedrooms do you need? Is a backyard a must? What neighborhood do you see yourself living in? Based on the answers to these questions, you can predict an approximate price range for your ideal home. This gives you a target to work toward. Once you know the ballpark you’ll be playing in, you can start to research mortgage rates and down payment options.
How Much Money Do You Need to Put Down on Your New Home?
Once you know how much your ideal home will cost, you should start to look at mortgage options. You don’t necessarily need to have a 20% down payment for your home, but the larger your down payment, the lower your interest rate will likely be. You’ll also have a smaller remaining balance to pay on your home, making it cheaper overall. Smaller down payments may also require private mortgage insurance — an added cost. Using a Federal Housing Administration loan, you can actually make a downpayment of only 3.5% on your home, and you’ll be locked into a fixed interest rate. This interest rate will likely be much higher than what you would get with a private mortgage.
Start Saving for Your Down Payment Based on Your Target Goal
Using an online mortgage calculator, you can estimate approximately what type of mortgage you can get based on the down payment you’re able to secure. Combining these numbers with the estimated cost of your ideal home, you can create a target goal for your down payment savings. Once you have that figure, it’s time to start saving.
Call Bill Swanson to Buy Your Omaha Home
In addition to securing a down payment and mortgage pre approval, you’ll also want to work with a trusted buyers agent. Bill Swanson has helped families in the Omaha area buy and sell homes for over 30 years. Start working with Bill Swanson by calling his Omaha, NE office at 402-679-6566.
Buying or Selling a Home in Omaha? Call Bill Swanson Today!
As a long-time resident of Omaha, I know the area and the surrounding communities intimately, and can give you access to information that you could never find online. If you want to know more about the community, are looking to buy a home in a new one, or need the help of an agent to sell your home quickly, conveniently, and successfully, then email [email protected], or call (402) 679-6566.