Many people in Florida wish to purchase a home but do not believe they have the funds to do so. Consider a recent Zillow study that declared, “Homeownership is simply out of reach for many Americans, including for many families…more Americans are renting than at any time in recent history.”
Also, consider that less than 40 percent of millennials can make the recommended 20 percent down payment on a home and that more than 60 percent of millennials also look for rentals while shopping for a home because they accept that homeownership is no guarantee. If this scenario sounds all too familiar, it’s never too late to reverse course and begin saving for a home. Keep reading to find a few methods you could utilize to come up with capital for a new home.
Find A Mortgage Lender
Many prospective homebuyers assume their finances will not allow them to purchase a home without ever taking the time to speak with a mortgage lender. Potential homeowners should speak with a mortgage lender regardless of their financial situation. Lenders can weigh various dynamics and criteria to determine your eligibility for a loan, such as your:
· Income
· Liquid Assets
· Credit Score
· Debt
The earlier you speak with a Florida mortgage lender, the better. That’s because lenders can provide you with a breakdown of how much money you’ll need to save to purchase a home in Florida and provide you with a brief blueprint on how to reach these savings goals. Mortgage lenders can break down the maximum you should expect to spend per month while factoring in things such as taxes, insurance, and interest rates on loans.
Pay Down Debt
If you’re trying to save for a down payment, it would seem counterproductive to put funds toward debt. However, doing so could allow you to increase your credit score. The higher your credit score, the more flexible lenders can be with your mortgage rates. Additionally, a higher credit score should net you a lower interest rate, which will save you significant money in the long run.
Additionally, when you pay off debt, you’ll free up cash for your housing payment. For instance, imagine you typically put $1,000 toward debt each month. If you pay debt aggressively, you could get to the point where you only need to put $500 a month toward debt. This would then allow you to allocate the remaining $500 for a housing payment.
Set A Timeframe And Open An Auto-Withdraw Account
After speaking with a mortgage lender, you should have an idea of how much you’ll need to have saved to purchase a home. Break the timeframe down and figure how much you’ll need to set aside each month. For instance, imagine you need to save an additional $14,000 to purchase a home. You determine that over two years, you’ll need to save approximately $583 per month. Set up a new bank account strictly for your home’s savings, and then set up an automatic withdrawal from your paycheck of $583 each month.