Saving for your first home, by Adrian Bates.

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Saving for your first home

By Adrian Bates

Everybody longs for a place that he can call his own and if not now, then somewhere in the future. You are young, so full of vitality and all that keeps recurring in your head is saving for your dream house. But the problem is, how do you save?

Millennials are encouraged to save for their dream houses in the future and the many changes that are witnessed now can help in paving the way for the future. For most, having the burden of taking care of their student loans, and saving for a future purchase seems like a huge financial challenge.

Getting into the property market requires more than your strength financially but also your willingness. There are several tools, services as well as grants that are suitably designed to make it easier for you to save for your future dream house.

START YOUR SAVING NOW

You must get started now for a better dream house in the future. However, before you can even begin, you should make sure that your source of finance is to start your savings plan. This will go a long way in helping you make your initial deposit.

A homeownership path is not an easy path and somewhere along the road, you will be tempted to quit but with a savings account right now, everything will streamline itself.

On the surface, the task may seem daunting, especially if you know the source of your fund is a little tight.

“Buying a home is one of the largest purchases you are ever going to make, so you need to make sure you are prepared”-Rachel Cruze, Financial Expert.

GUARD YOUR SAVINGS ACCOUNT

Saving can be a tough call and therefore, depending on your circumstances and ability, you need to shelter your savings plan using what you can easily achieve. Most financial experts will agree that as you are starting to save for your future home, go for the optimum standards where you will neither strain funding the account nor give the account an insufficient amount.

“Without taking the proper steps, a home can quickly turn from a blessing into a curse.”- Rachel Cruz

When saving, go for a plan that you will be comfortable with. As a matter of fact, you should keep padding your savings account regularly. According to the National Association of Realtors, 61% of most homebuyers are using their saving to make a down payment for their dream house. Therefore, it is never a bad thing to always make sure that your account is insufficient. That is what it means to guard your savings account.

WHY START SAVING NOW?

Why can’t it be after employment? Or some other time in the future? Well, time is changing so rapidly and people have come to a realization of having a place they call their own. The population is growing at a rapid rate and therefore, having your own space is important.

A stockpile of money takes time and time in the future is an asset that you may not have. Do not be fooled that if you consider saving in the future, you will have your stockpile overnight. That normally happens in an ideal world. “Obviously, saving money takes time, so it’s never too early to start.”- Brian Koss

The problem with most people is that they have the opportunity to start saving now but they want to wait until there is no more time.

These are the people who you will find still stuck on rentals while their age mates have managed to settle down in their own homes.

“If you are young and thinking about buying a home someday, don’t wait to save-start now.”Brian Koss, Mortgage Network.

IN ADDITION TO YOUR SAVINGS…

Most people will want to save money and then use the fund as their initial down payment. This according to most financial experts is a mistake. When saving to purchase a home in the future, most people will only concentrate on the down payment forgetting that there is something extra they ought to do.

According to Rachel Cruz, a person saving for his or her future home should also consider saving an addition of three to six months for emergency funding. This will not only help you cover any additional expenses- “in doing so, you are building a solid foundation for your finances,” “Conventional wisdom holds that individuals need to save six to nine months’ worth of living expenses in an emergency fund. This is in addition to saving specifically for your home,”Kevin Gallegos, Freedom Financial Network.

Extended savings for young savers will help them to cover the savings fund in case something goes wrong with the purchase they make. More often than not, most people especially the young when getting into a new home they’ve purchased will enter poor because they only considered saving only for the down payment. Saving process

Finally, you are ready to get things started and you are excited to save for your dream house. The saving process is simpler. First, you have to prepare a budget and stick to the budget. A mistake most Millennials do is spending on nonessential items and impulse buying. This kind of spending will only limit your dream of owning a house.

“The biggest obstacle to saving money is changing your habits,” “Sometimes sticking to a major goal is easier when you include family, friends and workmates in the challenge, because they can hold you accountable. Another tool is to keep pictures of your dream home in your wallet, on the fridge and next to your computer, so that you are reminded of your goal any time you’re about to spend money elsewhere.”- Brian Koss

One way to be committed to your budget plan is to ensure that once all the non-discretionary expenses are paid, you should deposit what is left of them in the savings account.

According to Susan Chong, most people should do and recommends starting the savings process by creating a timeline for the most ideal time to buy the house. She further argues that people should take the money saved specifically for the home and subtract 20%-the down payment, what is left of the money should be divided by the number of months you have until you want to buy, and hit the target each month.

YOUR CREDIT SCORE IS INTEGRAL TO YOUR SAVING

It is important that Millennials have a clue about their credit score status. A credit score is a number that has a great impact on determining your future purchasing power. Millennials who want to save for their homeownership should be concerned to know what their credit score situation is.

Most of the lender [mortgage] credit card companies and also the employers will be concerned with your credit profile.

Remember that you determine what comes your way and thus, take control of your credit by keeping the usage at around 35%of the available credit, also, more importantly, make sure that your bills are settled at the right time.

THE BOTTOM LINE

Be knowledgeable, buying a home is one of the most important things that will ever happen in your life and if you are not conscious about it or have little information about it, this may do you good damage, something that you may not like. Therefore, when planning to save for your first home, knowledge is key. Also as a smart millennial, you should record and make an analysis of your monthly expenditure to determine the chances of savings and where they occur best. That way, you will have no problem saving for your first home.

“One in five Americans has errors on their credit report — errors that could “ cost you a higher interest rate on your credit cards, a home mortgage or even your car insurance. If you want to buy a home, get fiscally fit. Time will be your friend if you start early.”- Edward

Carroll, senior loan officer.