Step 1: Stop spending, Start Saving
Lots of things you COULD buy, but not so much you NEED to buy. Hold off on the little stuff and keep your eye on the prize – Your first home, a bigger home, an investment property, your retirement dream.
Set up or boost up your automatic savings at the bank (click here for internet bank interest rates), pay off the credit cards, don’t buy a new car. (Having the garage, or the new car to put in it… Reminds me of one of my daughters years ago – spending her money to buy new purses and then having no money left to put in them!) I know, I know, that’s style and fashion and oh-so-important. That’s okay; you just need to decide what’s most important to you!
How much do you need? A 20% down payment is great, but I see that happening more with mover-uppers today. FHA is everywhere now, a complete turnaround from a few years ago, and the 3.5% down payment is the reason why. Having another 2-3% saved for closing costs (inspections, appraisal, insurance, transfer taxes) would be terrific, although I’ve seen some nice Seller closing help making up the difference over the last year or two.
The current interest rates are the number one reason to buy now if you’ve got your other ducks in a row already. And as the interest rates go back up, your dollars’ purchasing power goes down. Along with the interest rates, the decrease in home prices has made Howard County affordable for many people who had to look elsewhere in years past. So if this is the year for you, don’t wait: Give yourself the gift of homeownership.
Best Regards, Gretchen