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Posted by RE/MAX Main Street Associates on 4/21/2019

It can be difficult to find the extra savings to put towards your first home as a renter. With rent and utility prices rising, most peopleís paychecks are leaving them with less and less savings at the end of the month.

Buying your first home, however, can be a great long-term financial decision. It will help you build equity, and, eventually, youíll be able to use that equity toward another home or toward retiring.

In todayís post, weíll talk about some of the ways to save for a down payment while renting an apartment.

How much to save

In order to make the most of your first home purchase, youíll want to save up as much of a down payment as possible. This will help you receive the lowest interest rate and reduce the amount youíll pay toward interest.

If you can manage to save 20% of the loan, youíll also be able to waive private mortgage insurance (PMI), that would otherwise set you back around $100 per month or more.

Smart ways to save while renting

If youíre ready to get serious about saving for your first down payment, letís talk about the best way to approach your savings plan.

Pay off small debts

If youíve had that lingering credit card debt that youíve never quite paid off, now is the time. Take a look at your current debts. Pay off the smaller balances first and focus on debt with the highest interest rate.

This will enable you to start making larger deposits toward your down payment savings sooner and can help you avoid needlessly paying interest on small loans and credit card debt.

Open a dedicated account or CD

The best way to make sure you contribute to your down payment savings plan is to open a savings account or take out a CD (certificate of deposit).

A savings account with a high-interest return is a good option for people who are worried that they may need to access their funds before theyíre ready to buy a home.

If youíre comfortable with not being able to access your funds until a set date, then a CD could help you save more money.

Since CDs are a one-time payment, many people choose to combine both CDs and high-interest savings accounts to achieve their savings goals.

Regardless of which option you choose, be sure to shop around for the highest interest rate. Online banks tend to have higher rates than traditional banks and are also easy to sign up for.

Direct deposit a portion of your pay

Opening a bank account or CD wonít do you any good if you donít commit to contributing to it. If you are paid via direct deposit, visit your HR office and ask them to reassign a portion of your weekly pay to your new account.

By following these tips, youíll be able to better prepare for your down payment. Donít  wait! The sooner you start saving, the sooner youíll be able to purchase your first home.





Posted by RE/MAX Main Street Associates on 2/10/2019

If you know youíd like to buy a home in the future, youíve probably thought about saving money for all of the upfront costs that buying a home can bring. Saving the sizable amount of money that it takes for a down payment can be seemingly impossible to do. Itís impossible without making yourself seem miserable for a time, at least. You can save money creatively without sacrificing everything. Below, youíll find some tips for saving money that work for your life. 


Put Your Money Somewhere Safe


While investing in the stock market may seem like a good idea to put your savings on hyperdrive, itís risky. When it comes to your savings, try high interest savings accounts and CDs. The latter is a particularly good option because you wonít be able to touch the money for the time period that the CD will mature. Youíll also earn a bit of interest on the funds that are in there. 


If you plan to keep adding to your savings (which you should) a traditional savings account is best. You should have a dedicated account thatís solely for the house fund. Do some shopping around for the savings account that will have the best interest rate and be the easiest option for you. Remember that as boring as a savings account seems, itís a safe bet for your money. 


Apps Can Assist You


There are plenty of budgeting apps and apps that help you to set aside spare change. You should make use of these tools to help you reach your savings goals. Whether you need some help with budgeting or need to find ways to put your spare change to good use, thereís an app for that. You can even find apps that will reward you for good behavior. These apps may ďtipĒ you a few bucks for going to the gym or completing a project on time. Youíre saving money and doing good for yourself at the same time! Saving money for your future home can be fun if you find the right tools to help you.



Set Goals


One reason that many people donít save a lot of money is that they lack specific goals. If you sit down and look at your budget, youíll see where you can cut expenses. Then, youíll be able to have clear cut goals of how much you can save on a weekly or monthly basis. With your eyes on the prize of homeownership, you should be motivated to save where you can. Having specific numbers in mind can be a big help in reaching your long-term goals.




Categories: Uncategorized  


Posted by RE/MAX Main Street Associates on 4/1/2018

You want to buy a house, but you know that you need to save as much money as possible for a down payment. Although you've tried to save money in the past, your best efforts have failed to help you collect the funds that you'll need to make a down payment on your dream residence.

Let's face it Ė saving for a home can be difficult. Fortunately, we're here to offer creative ways to help you get the money that you'll need to make your homeownership dream come true.

Now, let's take a look at three creative ways to save for a down payment on a house.

1. Start a Friendly Competition

Competition often brings out the best in homebuyers. Much in the same vein, you and your friends may be able to compete against one another to see who can save the most money for a down payment on a home.

If you and your friends intend to buy a home together or separately, a friendly competition can make a world of difference in getting the required funds for a down payment. In fact, you can even award the winner of this competition with an "Ultimate Saver" trophy or other fun prizes.

Ultimately, a friendly competition is a great way to have fun with friends and save money for a down payment on a house at the same time. Regardless of who wins the competition, you'll notice that your down payment savings will increase, moving you one step closer to acquiring your ideal residence.

2. Use a Rewards System

Saving for a down payment on a home may seem like a long, arduous process. However, if you build rewards into your day-to-day savings efforts, you can earn incentives as you reach various milestones.

For instance, you may want to reward yourself with a special dinner every time that you reach a savings milestone. Or, you can always celebrate hitting a savings milestone with a trip to the dog park with your puppy.

3. Trim the Fat from Your Budget

It sometimes can be tough to remove cable TV, takeout meals and other excess items from your budget. But if you consider the long-term benefits of these short-term sacrifices, you may be better equipped than ever before to save significant funds for a down payment on a home.

Look closely at your daily, weekly and monthly budgets. Then, you can determine which budget items are essential and which are not and trim the fat from your budget accordingly. This will allow you to speed up the process of saving for a down payment on a house and ensure that you can achieve your homeownership dream faster than ever before.

Lastly, as you prepare to explore available homes, don't hesitate to reach out to a real estate agent for extra help. By hiring a real estate agent, you can get the assistance that you need to discover a great house that falls within your price range.





Posted by RE/MAX Main Street Associates on 2/4/2018

Saving for a down payment on a home is a long process that requires discipline and organization. But we all know that with so many other things going on in our lives it can be hard to spend enough time focusing on your budget.

Fortunately, there are several tools available to soon-to-be homeowners who want to keep track of their spending and make sure they meet their down payment goals. In this article, weíre going to talk about some of the best budgeting apps, websites, and other tools to help you keep yourself accountable so you can be living in your new home as soon as possible.

Why budget for a down payment?

If youíve saved money in the past for a purchase without a budget you might be wondering why you should go through the effort of creating one now.

However, there are many reasons to have a budget, especially if youíre planning on making an investment as large as a home. Here are just a few:

  • Keeping an accurate budget will let you know almost exactly how much you can expect to save for a down payment

  • Budgeting helps you locate and cut out expenses that would be better used in your savings account

  • Budgeting will give you peace of mind along the road to saving for your down payment

Now that weíve talked about the importance of making a budget, letís talk about some of the best ways to get it done.

YNAB

You Need a Budget, often shortened to YNAB, is one of the most useful tools for learning about and creating a budget. I donít know about you, but I was never formally taught how to budget in school. But, it would have been a useful class to have!

YNAB combines budgeting tools with educational materials to help you save while you learn more about managing money. It can be easy to feel lost when it comes to learning about personal finance--thatís what makes YNAB so great.

Their basic precept is that you ďgive every dollar a job,Ē meaning there wonít be any money in any of your accounts or in your paycheck that doesnít have a purpose. That doesnít mean you canít spend money on yourself every once in awhile, just that youíll have planned ahead for moments so you can manage them.

You Need A Budget is available for Apple, Android, on Alexa and in your browser.

Saving with your spouse

Planning a budget yourself is complicated as it is. But planning together with a spouse can be even more confusing. However, there are ways to effectively make a family budget to save for a down payment.

First, you should both make sure you have individual budgets to make sure you know how much money from each of your incomes can go into savings. Opening a joint savings account and having a certain percentage of your paycheck direct deposited into that account is a good place to start.


From there, monitor your savings for a month to see if you need to alter this number, and try to stick to your monthly savings goal.




Tags: budgeting   down payment  
Categories: Uncategorized  


Posted by RE/MAX Main Street Associates on 1/28/2018

Itís common knowledge that a 20% down payment is key when you buy a home, but is it absolutely necessary? With average home prices continuing to rise, itís hard to actually save up that sizable of an amount of money. Thinking bout the numbers, buying a home may seem impossible. 


Thereís good news: The 20% down requirement is actually a myth. If you put less than 20% down, you can still get a mortgage with most banks. Thereís a reason why you hear that you need to put 20% down to buy a home. If you donít put 20% down, you need to get either private mortgage insurance (PMI) or government insurance from the Federal Housing Administration (FHA). These types of mortgage insurance protect the lender if you donít make your payments and the home is foreclosed on. 



Do PMI Payments Go On Forever?


When your loan-to-value ratio reaches 80 percent, youíre able to ask your lender to cancel the insurance. Once the loan-to-value ratio reaches 78 percent, the lender has a requirement to cancel the PMI. This type of insurance can be costly, averaging at least a few hundred dollars a month. 


Alternatives To 20 Percent Down


Look at financing before you find a house. Thereís a few programs that can help you to buy a home without 20% down. Thereís different ways to qualify for these programs, so your best bet is to talk to a lender well before you start your home search.


Government programs through places like the US Department of Agriculture and the Federal Housing Administration help people to buy a home with very little down- anywhere from 0-3.5%. Some of these programs can prove to be costly on the backend, due to extra insurance requirements, but they do provide an alternative path to home ownership.  


Thereís also an option to actually finance the down payment with what's called a subordinate loan. his may make sense for some, however, you are taking out a loan in order to pay for another loan. The process may be counterintuitive for you and your financial situation. 


Different Paths To Homeownership


While thereís many different paths to owning a home, thereís no one right answer. Since everyone chooses different properties and has different financial situations, thereís a way for you. Even if saving up a 20% down payment is seemingly impossible, thereís way to get around it. Start with talking to your bank and other lenders to see what types of programs are available to you and discover what your path to homeownership is.




Tags: PMI   down payment  
Categories: Uncategorized