Tag Archives: home buyer

Budgeting Checklist for Buying Your First Home

first-home

Buying your first home can be an exciting, but overwhelming experience. With the right bank and agent, most of the hassle should be taken off your shoulders. So now, it’s time to make sure you’re checking these items off your list to allow for a smooth house buying journey – without breaking the bank.

Check Your Credit Score

This is always one of the top points on anyone’s list. Making sure your credit score is high and on the rise will allow you the opportunity for better rates! Look for any issues with your report and contact the credit bureau to get them fixed.

Gather Your Documentation

You’ll need to get your documents in order when coming to the bank to discuss a pre-approval letter and loan. To help you get started, you should plan to have the following documents when applying – but contact us to find out if there’s anything else you’ll need in advance: 

  • Income verification/employment – Last two years’ tax returns, W-2s, 1099s and your last few pay stubs
  • Credit/ID – Drivers’ license, Social Security card or acceptable alternatives
  • Financial condition – Bank and brokerage account statements including retirement accounts, proof of funds to close or a gift letter (if your down payment is coming from a gift)

Secure Pre-approval

Having a pre-approval letter shows a buyer you are serious and have the funds to afford the home. This also lets you know how much home you can afford, so you don’t start hunting for houses that are out of your budget.

Decide On Your Max

Even if you can afford a certain amount, not spending it all may be wise. Scale back a little and decide on the price you’re willing to spend and hold yourself accountable to not pass that limit.

Think Of Additional Expenses

Repairs, maintenance, monthly bills, moving costs and closing costs will all factor into your budget. Know how much income you are making each month and subtract all of these costs, as well as other items like gas, groceries, loans and so forth. This will show you how much you’ll actually have left over to put towards your mortgage payments. Deciding on your max budget will only help you – instead of spending the full amount you may actually be able to afford.

We hope this checklist reminds you of the items you need to complete and think of to help you stay within your budget. If you’re looking for a great place to get your mortgage, we’re here for you! Contact us or stop on in to allow us to help you on the path to buying your dream home!

7 House Buying Tips to Save Money

house

It’s finally house hunting season and you could not be more excited to get the ball rolling on your big purchase! Before you hit the road or the search bar, take these 7 tips into consideration.

1. Know Your Limits

Before signing the papers or falling in love with the first home you see be realistic about what is in your budget. We recommend spending no more than 25 percent of your monthly income on the mortgage. When you know what this number is, be sure to stick with homes in that price range. Don’t even go into homes that are going to be proportionately out of that limit, or you may kick yourself later as you feel straddled with a home you can’t afford.

2. Be Realistic About Fixer Uppers

While they are fun to watch on TV, if you don’t have the skillset to actually fix homes, a house that needs a lot of TLC is likely not for you. Many see a low price on a home and jump on it, thinking the work needed will be minimal and easy. When it comes to home improvement, no fix is simple and this is even more true if you are a newbie to the renovation game. Often people do not realize the time commitment and additional cost that come with dramatic improvements.

3. Provide a Strong Down Payment

The more you are able to give for a down payment, the greater equity you will already have in the home in addition to a lower monthly payment. This will save you money on interest in the long run.

4. De-clutter the Current Space

It’s time to spring clean your “extras.” We all have things sitting around our home that go untouched and unneeded. Start selling these items at a local thrift store or posting them for sale online. This will help to make your move easier and be a helpful way to start saving for the down payment!

5. Take Your Time When Shopping

Don’t let the desire to get out of your current living space cloud the judgement of the purchase. Take your time studying each home and realize that this is one of the most important big purchases you will make in your lifetime. It needs to be a thoughtful, decisive purchase.

6. Eliminate Other Debts

Get a great deal on the mortgage by making sure your credit score is in tip-top shape. A large purchase with a loan or credit card right before you buy a home will certainly have an impact on your mortgage rate. Boost your credit score by paying down the debt you have and stay away from any other purchases until after the home is in your possession.

7. Conduct a Personal Roof to Basement Inspection

Know the property backwards and forwards before signing the dotted line. This means hiring a trusted inspector and having a contractor come to confirm the findings. After this, there is still a final step. You need to conduct a thorough inspection to ensure that you know exactly what you are in for. This is a great checks and balances system to confirm that you are getting a fair deal that won’t end up costing you thousands in repairs later.

Be smart with your finances and don’t spend all your money on a “dream home.” We’re here to help you know how much house you can afford, while offering mortgage solutions to fit your needs.

4 Steps to Buying a Home That Won’t Bust Your Budget

buying a home

It’s that time of year when you’re likely to see ‘for sale’ signs on every block. Maybe you already have your eye on one and go out of your way to drive past it on your way home from work. Before you leap into purchasing a home, be sure to take these four steps before signing the bottom line.

1. Understand Your Monthly Expenses

Alarmingly, many Americans don’t have a true understanding about what money they have coming out each month. This can be a dangerous territory to get into, as it’s likely that there are a significant portion of the expenses that may be unnecessary. Take the time to have an understanding of what each of your monthly expenses are and if any can be cut or lessened. Maybe there’s a subscription you’ve forgotten about or haven’t realized how much money you are putting towards name-brand groceries each month.

2. Know What You Can Afford

Once you have your expenses broken down, you will have more of an idea of what you have coming out. Next, you should understand what you have coming in. Account for each person’s income contribution for the home. Subtract your monthly expenses from the after-tax amount and you will have an idea of what you can afford. You may want to consider meeting with a mortgage specialist to have a robust account of what homes could be in your price range.

3. Understand Home Buying Expenses

Being a homeowner comes with many responsibilities that sometimes can’t be accounted for. From broken pipes or a leak to a busted HVAC, the costs can be overwhelming at a moment’s notice. It’s important to understand the expenses that may come out of home ownership. Even if there isn’t something breaking, you have the responsibility of additional upkeep.

4. Set a Goal

Once you have a complete understanding of where you are and where you might be, you can set a goal. If the house you want is out of your price range, make it a goal to be able to afford a home like this. Take a look at what expenses can be cut in addition to how you can make additional income to get you to your goal within a reasonable time frame.

Don’t strap yourself into a payment that won’t fit your lifestyle. Allow us to help you purchase your dream home with a mortgage from Timberwood Bank!

How to Save for A House Down Payment

home

If you’re looking to buy a house, having a larger down payment will offer you a lot less financial stress in the long run. However, in order to put a larger sum of money down, you will need to take the right steps to save. Follow these 5 steps and you will be on your way to being a first-time home owner!

Step 1: Figure out how much you will need to save – If possible, secure a number or range on the amount you can responsibly spend on a house. You can plan to sit down with a mortgage lender or use a home buying calculator to help figure out how much you can afford. With the use of a calculator, be sure to remember that it will not take in account every aspect of your financials.

Step 2: Find the best ways to save –  After you know an estimated range of how much you need to save, the next step is to figure out what expenses you can cut down – maybe skip vacations for year. The money you would spend on vacation can make a huge contribution toward a down payment. Next, take a look at your monthly expenses and see what you can reduce or eliminate; put that extra money into a down payment savings account. Lastly, work more. This may be easier said than done, but when there is opportunity to work an extra shift or add on hours, do it. Working more will be worth it when you are able to find your dream home!

Step 3: Transfer a fixed amount into a savings account each month – In addition to saving that extra money, set up a savings account specific for your house down payment. Then, with each paycheck you receive, have a certain amount automatically taken out each time and deposited into that savings account. That way it will remove any temptation to spend the money on other purchases. Before you know it, you will have enough money for a down payment.

Step 4: Leave room for flexibility in your savings – With all of this saving, it is equally important to leave room for flexibility. There will be other demands on your finances such as: car repairs, uncovered medical expenses or even loss of a job. You will need to be ready when and if these happen to occur – it is also helpful to create an emergency fund!

Step 5: Reduce your high interest rate debt – If you have high interest rates on your credit cards, it can painfully limit your ability to save. For this last step, do yourself a favor and pay off those high interest credit cards. Begin with your highest card and once that is paid off, close it and proceed to the next card. Lastly, transfer your credit card balances to the card with the lowest interest rate.

The process of buying a house can be very long and probably will require a big hunk of your savings. However, creating a larger sum for your down payment will sure be rewarding when you become a first-time home owner! Follow these 5 steps, and we can ensure much less stress in the long run.

So You’ve Bought Your First Home: Savings 101

home

Congratulations! You’ve taken a big step in your financial future by purchasing your first home. As a new homeowner, you may be worried about the chunk of change you just spent, and your bank account may be looking a little slim right now. Luckily, Timberwood Bank is here with a few simple saving solutions to help your funds increase.

Slow Your Spending

As you have just made a big dent in your savings, now is the time to slow down on your purchasing behavior. Be sure to be aware of your spending habits. Don’t go shop for an extra pair of shoes or dine out multiple times a week, as that can add up in a hurry!

Revamp Your Emergency Fund

A bigger house means bigger emergency expenses. Put a little extra money here and there into your emergency fund to save up for problems such as needing a new roof, replacing a broken appliance or common plumbing issues. Being prepared means your bank account will take less of a hit since you have your emergency fund to fall back on.

Stretch Your Grocery Dollars

Eating out can cost you a fortune! According to the Bureau of Labor Statistics, the average household spends an average of $3,008 per year on dining out. Instead, find discount grocery stores such as ALDI in order to meet your budget. Setting a budget and only buying items you truly need will help stretch your money. Finding recipes for casseroles, soups and other large portion meals will help save money by creating leftovers for you to bring as lunch every day to work.

Don’t Buy New Furniture

Even though you’re excited and want to decorate your new home to the extreme, try to wait. Slowing down and taking the time to find second hand stores, garage sales and so on will help save you hundreds to thousands of dollars on furniture. It’s easy to do a little digging and find store-quality items.

Clean Out the Closet

As you’re already packing to move into your new home, now is the time to get rid of items you no longer need. Facebook Marketplace, Ebay and other online platforms allow you to easily sell items to others all over the world! Not only are you freeing up space in your new home, you’re making a few extra bucks along the way!

Being a homeowner is an exciting new journey, but keeping up with your finances can be a little hectic. These tips will help you put a few more dollars in your bank account while enjoying the joys of your new home!