Judith Sutton ABR CRS IDS PMN ASP IAHSP SRES GREEN
Judy@JudithSutton.com 908 803-0472
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SAVING FOR A HOME IN 2024
WHAT YOU NEED TO KNOW ABOUT SAVING FOR A HOME THIS YEAR
If you are planning to buy a home soon, knowing what to budget for and how to save may sound intimidating – but it doesn’t have to be. One way to ease those concerns is to make sure you understand some of the costs you may encounter upfront. And to do that, always turn to a trusted Real Estate Professional that can show you your options. I can help you set a plan and take a strategic look at your budget and your process before you even get started, as well as refer you to tried and true professionals who will have your best interests front and center.
Here are just a few things experts say you should be thinking about…
Your Down Payment
Saving for your down payment is likely to be top of mind as you consider buying a home. But do you know how much you will need? While every buyer’s situation is different, there is a common misconception that putting 20% of the purchase price down is required. An article from the Mortgage Reports explains why that it is not always the case:
The idea that you must put 20% down on a house is simply not true. The right amount depends on your current savings and your home-buying goals.
To understand your options, please call me to go over the various loan types, down payment assistance programs offered, and what each one requires. The more you know ahead of time, the easier the process will be for you.
Closing Costs
Make sure you also budget for closing costs, which are a collection of fees and payments made to the various parties involved in your transaction. Bankrate explains:
“Closing costs are the fees you pay when finalizing a real estate transaction, whether you are refinancing a mortgage or buying a new home. (These costs can amount to 2 to 5 percent of the mortgage so it is important to be financially prepared for this expense.)
The best way to understand what you’ll need at the closing table is to work with a trusted lender. They can provide you with answers to the questions you might have.
Earnest Money Deposit
If you want to cover all your bases, you can also consider saving for an earnest money deposit (EMD). An EMD is money you pay as a show of good faith when you make an offer on a house. It can be between 5% and 10% of the total home price which is held in escrow and applied towards the closing. Sometimes to make a stronger offer, it can be more.
This deposit works like a credit. It is not an added expense – it’s paying a portion of your costs upfront. You are using some of the money you have already saved for your purchase to show the seller you are committed and serious about buying their house. Here is how it works as part of your sale:
“It tells the real estate seller you are in earnest as a buyer . . . Assuming that all goes well and the buyer’s good-faith offer is accepted by the seller, the earnest money funds go toward the down payment and closing costs. In effect, earnest money is just paying more of the down payment and closing costs upfront.”
Keep in mind, that an EMD is not a requirement, and it does not guarantee your offer will be accepted. It is part of the negotiations to gain the respect and attention of the seller. It is important to work with me, your trusted real estate advisor, to understand what is best for your situation and any specific requirements that are considered customary and usual in our area. I will advise you on what moves you should make so you can consider the best possible decisions throughout the buying process together, with professionals guiding you. Call me. I care about my clients and their needs.
For the love of success,
For the love of driving your home forward,
Adding value for my clients and loving where we live!
Judy@JudithSutton.com
COLDWELL BANKER...GUIDING PEOPLE HOME SINCE 1906
908 803-0472
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