How to Save Money for a Down Payment and Closing Costs on a New House: Massachusetts MABA RealEstate HomeOwnerhsip

 When you’re wondering how to save money for a house, it can start to feel like you’ll never scrape together enough for a down payment. Yeah, you already know that Rome wasn’t built in a day. Well, the same holds true for building a down payment. It takes time!

How to save money for a house

 Still, as long as you grease the gears early (like now), you’ll barely notice you’re saving until boom! One day in the foreseeable future you’ll be sitting on a pile of money that could pave the way to homeownership. Sound good? Good. Here’s how to get started.

Trim those quiet, unnecessary expenses

 OK, let’s shift those preconceived notions. Contrary to popular belief, the answer to how to save money for a house isn’t mostly about grueling sacrifice e.g., holing up in your apartment under a bare light bulb, eating ramen, and piggybacking off your neighbors’ Wi-Fi.

 “It’s about a lifestyle change,” says Travis Sickle, a financial adviser with Sickle Hunter Financial Advisors in Tampa, FL. A more sustainable strategy, he says, is to pinpoint your silent money siphons that you barely notice. Odds are you could try some of the following cost-cutting measures without feeling the pinch:

  • Replace your two hundred and fifty dollar monthly cable service with a ten dollar Netflix standard streaming account, and you’ll save two thousand eight hundred and eight dollars per year.
  • Cut that languishing gym membership at fifty dollars per month, you’d save six hundred dollars a year. Go running instead!
  • Packing lunch will save you about sixty dollars a month or seven hundred and twenty dollars a year.
  • Bike to work. For a ten mile commute, biking can save you around five dollars a day, according to Kiplinger or one thousand two hundred and fifty dollars a year.
  • Start a coin jar. Saving all your loose change can have a big impact up to seven hundred dollars, according to financial blogger J.D. Roth.
  • Turning down your thermostat just three degrees could shave almost ten percent off your electrical bill, netting you twenty dollars a month on a two hundred dollar bill, or two hundred and forty dollars a year.
  • Curb those dinners and drinks out at restaurants, which can quickly add up. If you typically shell out forty dollars three times a week, reduce that to one evening a week, and you’ll save eighty or four thousand one hundred ans sixty dollars per year. (Bonus: It’ll make those times you do indulge more special!)

 

 And if you and your significant other team up and try all of the above, that would amount to ten thousand five hundred and fifty dollars per person, or twenty one thousand and one hundred dollars in one year’s time. Just remember that when you’re thinking of ordering a second glass of artisanal craft beer.

Open a dedicated account

 If you don’t have a savings account, now’s the time to open one. A checking account is great for daily expenses, but when it comes to saving money well, they don’t call them savings accounts for nothing. You’ll earn interest on your balance, plus there’s a lot to be said for the mental benefit of having a specific place to stash your down payment. While interest rates haven’t been very impressive in recent years (though, you’ll be grateful for that when it comes time to get a mortgage), it’s still great to have a dedicated account where you can see how you’re progressing toward your goal.

 Financial planner Bob Forrest of Mutual of Omaha points out that CDs and money market accounts offer higher gains than savings. You’ll need a larger minimum balance than for a regular savings account, but your goal is to make it grow, not shrink, right? If you’re using a CD, just make sure you don’t withdraw the money before the time is up or else you’ll face some stiff penalties.

Automate your savings

 If you’re struggling to put enough money away because of the constant temptations to blow your paycheck, consider automating the process. Ask your employer if you can have your paycheck deposited into multiple accounts if so, instruct it to send a certain percentage of your salary directly into your savings account. Or go through your bank, setting up automatic withdrawals from your checking to savings account that will force you to keep spending in check.

Tap into your IRA

 Another great place to stash your cash? A traditional or Roth IRA, says Forrest. In addition to being a tax-friendly retirement vehicle, it allows you to withdraw up to ten thousand dollars  for a home. While withdrawals from a traditional IRA will be taxed, a Roth IRA you’ve owned for more than five years won’t be taxed at all, as long as you’re a first-time home buyer. Just be careful with this method, though, as you will be denting your retirement funds. But combined with other savings, it can quickly add some heft to your growing nest egg.

Check out down payment assistance programs

 Depending on the city and state you live in, you may be eligible for down payment assistance programs, which provide money to help people buy a home. Most offer up to fifteen thousand dollars, typically in the form of a grant or low-interest loan. Most require your income to be below the area median. But even if you make more, do your research there are programs that provide funds for higher-income households.

 If saving up for a down payment is a challenge, it may surprise you to know that you don’t always need to save twenty percent for a down payment. With certain kinds of loans, you can get away with a down payment as low as three point five percent (for FHA loans) or even zero percent (USDA loans). Here’s more on how to buy a home without twenty percent down. Once your down payment is on a roll, it’s time to start looking for a home—and to do that, you’ll need to determine exactly how much house you can afford.

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Check out our First-Time Home Buyer Resource Center for more tips to help you through your home-buying journey.

The post How to Save Money for a Down Payment and Closing Costs on a New House appeared first on Real Estate News & Insights | realtor.com®.

 

 

First Time Home Buying in Massachusetts

first time home buyers in massachusetts real estate agents | homebuyer real estate buyers brokerMABA Buyer Agents help first time home buyers reduce the stress and frustration normally associated with buying a home or condo – especially for first time home buyers.

As a first time homebuyer in Massachusetts, you can turn to our non-profit organization to help you understand and navigate the complexities of the entire Massachusetts real estate transaction, from mortgage pre-approval until you are handed the keys to your new home or condominium. Each of our member buyer's brokers and agents works only for their buyer-clients and never for the seller of the home or condo that their buyers want to buy.

MABA Buyer Agents will take the time to learn about you and your real estate goals, help you understand your options, including first time home buyer programs, properties and/or condominium associations, estimate real property values and put together a negotiating strategy to help you increase the odds of getting your offer accepted in our competitive Massachusetts real estate market. After advocating to get your offer accepted, your MABA buyer's agent will be there for you at your home inspection and help you protect your deposit through the inspection, purchase & sale and financing contingency periods.

You can buy your first home or condo with confidence knowing that your MABA buyer agent is committed to saving you time and money and helping you make your best home buying decision.

 

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Changes in Massachusetts Real Estate Law & How they Effect the Consumer:

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