Maybe you have always dreamed about owning your own place. Maybe you’re just in “that” phase of your life. Or maybe, it simply makes the most financial sense for you to own rather than to rent.
Either way, buying a home is one of the biggest financial decisions you can make in life, and there are plenty of pitfalls to avoid along the way.
When you start looking, think about what you can — and want to — afford. That’s not just a question of how big a mortgage you might be able to get, as your monthly costs will be more than just your loan payments. There might be HOA fees, maintenance costs, and taxes coming out of your account regularly. Know what the monthly costs of a place would be all in to decide whether it’s the right fit for you.
Also know what you’re looking for. If you need certain transport links and school access to make your life work, a cheaper home in an inaccessible location likely won’t be the answer. Don’t forget, to make financial sense for you, it has to be workable in your day-to-day.
Equally, the perfect home probably doesn’t exist. There will always be something, and that’s okay. Just make sure you know what your needs and non-negotiables are so you can make the best decision for your household.
Saving Hacks for a Downpayment
For many people, transferring their down payment at the start of a home purchase is the single biggest banking transaction they’ve ever completed. So how do you get to having such a big stash of cash?
Convention suggests you should aim to pay down 20% of the total purchase price, even though this could vary depending on your personal situation, what makes sense for your finances, or if you’re a Veteran. Use our home affordability calculator to figure out your goal down payment by calculating how much home you can afford.
Next you can draw up a budget, comprising your existing savings, income streams, and other financial obligations, including debt payments and rent.
Saving your way to a down payment might also take a little time, so let your money work for you along the way. Stashing your cash in a high-yield savings account can help you get there faster.
Check out SoFi’s high-yield savings accounts, and get going on your savings goals.
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