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Feb 27, 2023

How to Save for a House in One Year

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Saving for a house for most future homeowners is no easy task. But, with some tips from TruStone Mortgage to learn how much you can afford and strategies on saving for your home, the first home of your dreams may not be as out of reach as you think. Let us help you determine if this could be the year.

Figure Out Your Budget

There's nothing worse than searching for your dream home and realizing too late that you ended up looking at homes you can't actually afford. One important point to keep in mind is that just because a mortgage lender says that you can take out a mortgage for a certain amount, doesn’t always mean that you should. To avoid this common mistake, TruStone Home Mortgage offers various tools to ensure you know how much house you can afford ahead of time.
For a quick way to plug in numbers, run current TruStone home loan rates, against a Mortgage Qualifier Calculator. To ensure you meet your financial goals, you will first need to establish a down payment budget. Keep in mind your timeline for this budget. If you want to save for your first house in 12 months, you must represent that in your spreadsheet. It’s also important to consider the length of the mortgage loan you feel comfortable paying off. A general rule of thumb is to follow the 28%/36% rule, which means do not spend more than 28% of your gross annual income on housing costs and no more than 36% on debt (including housing, credit card, student loans, etc.).  

Advice from the Experts

For assistance with ensuring your budget is set up to realistically save the amount of money needed within your timeline, contact  an experienced mortgage expert. They can provide you with helpful tips on how to improve your chances of being able to save for your first home.
If this will be your first home mortgage, mortgage consultants may be all the more useful to you. Consider your mortgage consultant as a first-time home buyer guide for all of your questions along the way. Some financial institutions, like TruStone Financial, offer special first-time home buyer programs, which offer discounted home loan rates like our Home Ready Program, FHA loans and the Start Up for First-Time Homebuyers program for homebuyers.

Mortgage Lenders? How to choose.

The benefit of having a mortgage loan through a credit union is they often offer members favorable interest rates on home loans, in comparison to banks or other mortgage brokers. Choosing the right Mortgage Lender that will stick with you throughout this exciting process is a crucial step in the home buying journey.
If you're in a time crunch, you are going to want to get a majority of the busy work out of the way early on. If you want to appear more serious to those selling their homes, you should first get pre-qualified for a mortgage. In addition to ensuring your credit score is mortgage-worthy, a lender will ask you for information including but not limited to your social security number, employment details, bank account numbers, tax returns from the past two years, and your intended down payment.

Maximize Savings

All the money you’re saving towards your new house needs a safe place to grow. While most people have a savings account, trying to save for your home down payment within a year requires a higher interest rate option like a money market or a certificate. Typically, a traditional savings account will offer a very low dividend rate , while a high-yield savings account or Certificate can provide a significantly higher rate. Consider opening an account to set aside raises, tax refunds and other windfalls. For a better idea of how much money can grow in your savings account, use a compound interest calculator.
The more you know before purchasing a home, the more you’ll be able to save. Take time to put a solid plan in place and track your progress at least monthly. And regardless of whether you already started saving or your starting to save for the first time, remember we’re here to help. For more insight into the homebuying process, visit with TruStone Home Mortgage today and start your journey to owning your dream home today.  Contact one of our mortgage consultants today.
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