Upfront Home Buyer Costs


It’s crazy but it’s true… if you have zero debt and $10, you are richer than 15% of American households according to Forbes. Furthermore, six in 10 Americans aren’t be able to afford an emergency medical bill of $1000 (per Moneyish). Whether you want to save for a down payment, a Mediterranean cruise or just be more financially secure, now is the time to start saving.

Set A SMART Goal
Goals will keep you motivated and help you monitor your progress. Your goal should be S.M.A.R.T:

S – Specific: Write the exact amount of money you would like to save, and for what (e.g. saving $10,000 for a down payment on a new home).
M – Measurable: With your specific goal, you will be able to see how far along you are with your goal. The more you save, the more motivated you will be!
A – Attainable: While it is good to have “stretch” goals, setting a goal that is truly out-of-reach can be demotivating. Set a goal that is challenging but possible.
R – Relevant: Make sure your goal fits into your overall life plan. Prioritize your goals to fit your desired lifestyle.
T – Timely: Your goal should have a deadline to be accomplished. If your goal is to buy a house, you may be surprised how quickly you can get there! Using your tax return or strategic resources available through Michelle Bakarich and NOVA Home Loans, you may be able to achieve your goal even sooner than you think!

Make Saving Your Priority
Once you have your goals set, stick to them! Keep your goal fresh in your mind every day by setting up a visual “dashboard”. Fill it in every time you put money into savings and remind yourself of why this is your priority. Breaking your goal into chunks (e.g. $192 weekly to reach a $10,000 goal in one year) makes your goal seem manageable. Also earmark money for unexpected expenses, such as car repairs, so that you don’t have to dip into your savings.

Have a Plan
Lenders require that the home appraise at the amount you plan to purchase it for to lend you the full amount. This is an upfront cost you will pay, and is usually about $450. If the property doesn’t appraise, your REALTOR will negotiate options with the Seller to try to help you get the home you want, or you can cancel the contract at no penalty to you.

To stay on track, you have to know what ‘on-track’ looks like! Track your spending: This will help you see how fast your coffee habit and lunches out can add up, as well as identify bad habits such as spending more than you earn. Apps like Mint (by Intuit) can simplify the process! Pay off high-interest debt: It can be hard to save when you have large monthly payments for outstanding debts. Try to pay down the credit card or loan that has the highest interest rate first. The more debt you pay off, the more money you will have to save.

Budget Savings like an Expense
Viewing your savings like a bill can help you stay committed to saving money. Try setting up an automatic transfer each month from your checking account to your savings account. It may take some getting used to, but before you know it you will see your savings building up!

Use Cash
Studies have shown that paying cash helps people spend less money. Take advantage of the science by getting out only the amount of cash you need to stay in your budget, and save the debit card for unexpected expenses only.

Saving for big goals, such as a down payment, can seem daunting, but following these simple steps can help make it easier. For strategies to get you qualified for your dream home quicker, call or text Michelle at 520.991.6234. Home ownership is within your reach!

Adapted from Buffini & Company’s ‘Smart Saving Strategies for 2018’.