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How to Save For a New Home - Best Tips for Saving on a House
Buying a Home
Buying a new home is such an exciting time in life. To get the best deal you can on the best home for you and save the most money, there are some things to keep in mind. You need to completely understand your current budget and situation financially. You will want to know what your credit report is showing as well, unless you tend to score really well in the credit department and pay off things quickly and always on time. Knowing what you can really afford in a house is another big thing to consider. It is so easy to want more than we can afford, but many people have been hurt this way and it is much wiser to buy and hold on to what you can, comfortably. That is so much better than losing a home.
Make sure to take into account what your needs are, and that of your family if you have family living with you. Consider the changes in the real estate market over the last several months that may affect your purchase for better or worse. Taking all of these things into account can really help to avoid pitfalls and help you save a lot of money when you go to buy a house.
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Explore the Market and you will save big
Consider when is a good time to buy, if you have that luxury. For instance, you will find out very quickly if it is a buyers market or not. What you are looking for are conditions in which homes are lower in price than they have been in years. The pendulum tends to go back and forth, and it is great if you can get in on things when it shifts to being a buyers market. It isn't absolutely necessary but it can really help you to save a lot of money. When it's a buyers market, you will get more for your money basically, and if you need to sell in the future, it may be a better situation then. Thinking of not just the "now" is a great way to think.
When the market fluctuates like this, the lending industry will lower interest rates which also translates into bigger savings for you. Its is exciting to see how many hundreds of dollars you may be able to save each and every month on your mortgage payment, just because the interest rate goes down a quarter percent, for example. Think about this for a minute....that kind of savings each and every month is what can help you actually get into your new home, rather than just dreaming about it! So patience may be in order if you want to be a part of a buyers market and you can see why it is worth waiting for. Saving up for a time like that, can allow you extra money every month to put towards other dreams in your life, like college tuition, travel, investments and retirement.
Credit, Tax Breaks and More
Make sure you establish a good credit history, no matter if you have had credit in the past or not. Start with a credit card if you have no credit history yet. Get one with the lowest interest rate you can, spend wisely on your needs, pay it off fully and regularly. If you have student loans, car loans or if you have been renting, make sure to pay on time for those things as well. This is a great way to get approved for that special home you have been saving for.
Buying a home is an investment that grows over time and allows for several tax deductions, so this will save you money as well. These include mortgage interest, closing costs (sometimes) and property taxes, points paid and loan application fees. Finding out how these kinds of tax breaks can translate into more savings for you is very helpful. Ask a financial adviser perhaps to go over everything with you and don't feel bad to ask for explanations or for them to re explain things. One good tip is to visit the IRS's website for what is the latest information regarding tax breaks for buying a home at www.irs.gov.
First Time Buyers Can Save Even More and Equity
You can save also with special tax credits, which first time home buyers are entitled to. Often, you can claim these credits on your tax return. This can lower your tax liability. Make sure to find out if there are any special tax credits that you can currently take advantage of.
Paying your mortgage increases your equity as well. Renting gives you no equity over years and years of time that you could be building your equity. So real estate is a great investment. Look at people like Sam Zell, Harry Helmsley (who has passed) and Donald Trump, and more! Those are some major fortunes made on real estate in history.
Have you ever saved money for a house, or saved money to put a down payments on a house?
© 2011 Paula