3 Helpful Tips for Saving for Your First Home | St. Johns Bank
If you’re in that stage of life where you’re sick of paying rent that goes nowhere, it is probably time to start saving for your own home. While this seems overwhelming for first-time homebuyers, there is actually a lot you can do to start preparing and saving for your own home!
Here are three helpful tips that will help you save for your first home.
1. Prioritize your credit score. Having excellent credit is important when buying a home. The better your credit score is, the more money a bank will be willing to lend.
To improve your credit, you will need a line of credit! If you don’t have a credit card, getting one is wise. But make sure to pay it off every month to show you’re a good borrower.
The longer you have a credit card and the more regularly you pay it off, the better your credit score will be.
2. Save up cash. Your credit score is only one element of determining your loan eligibility. Another component of your financial responsibility will be how much actual cash you have in both your savings and checking. The higher your balance, the better you will appear to borrowers.
Additionally, this cash will be critical for your down payment on the home. Make your savings goal 20% of the cost of your home budget. While HSA (first-time home buyer) loans with lower down payment requirements are available, 20% is typically standard for traditional loans.
Even if you don’t need that much, go ahead and save as much as possible.
3. Budget to help you save. Living within your means is vital for saving money. Create a budget for your monthly expenses and stick with it.
Being aware of and monitoring your spending will help you save much more easily. Create a calendar of your expenses to know when bills are due, allocate a set amount of money for each cost, such as bills, groceries, gas and rent, and stay within that budget as best you can.
Owning a home is a significant investment and will help you in the long run financially. Saving up for such a big purchase can be daunting, but it’s doable with financial discipline!
If you need assistance saving for a home loan, or are ready to apply for a mortgage, visit us today!