Some people can just save money. Others can't spend it fast enough. Which one are YOU? When it comes to real estate, having a healthy down payment is essential, with over 20% down payment being ideal in most loan officers eyes. For example, after looking around, you come to realize that most houses you are interested in are between $175,000-$210,000, which translates to a 20% down payment of $35,000-$42,000. WHOA is the look most new homebuyers give me. Rather than get pessimistic, THINK--lets use technology to help you get there! What you say? Apps. I mean, honestly, most of us are already on our phones ALL THE TIME. I first played around money saving apps to prep to teach my First Year Seminar class, because come on, money management (link) is HUGE for a college student too! All that I tried (mint, digit, stash, acorn, robinhood), all had their pros and cons. Do you know about and have interest in stocks? Well, Stash, Acorn and RobinHood might be your cup of tea. Just want to save without having to overthink it? Digit is your bet. Want to be better at planning what you spend and see where you money goes? Mint is your thing. It will STILL TAKE TIME to save, but these apps help you get there.
My favorite by far is Digit. It analyzes my spending patterns by linking to my bank account. Based on the history of spending, it creates an algorithm to 'auto save' based on what I am able to save comfortably. I LOVE this, I don't have to remember to save and I don't miss the funds either. Mentally, it works for me.
Low Balance Protection another sweet feature of Digit, if my balance gets low in my bank account, it transfers funds from Digit to my account.
You can set goals for your savings, for example $10,000 by 1/1/2021 (maybe for a down payment perhaps, hint, HINT).
You can see how much you save daily (see below right screenshot) and a weekly bank account balance text is sent every Monday morning.
Have MULTIPLE savings goals (see below left screenshot).
FInally, you can 'BOOST' (lightening bolt in below left pic) your savings on any of your savings goals.
So if you have a dream house but no FUNDS, start saving! Do what works for you; let technology help you on your way to accomplishing your dreams.
Author, Summer Zwanziger Elsinger
I am also an Associate Professor of Management & Marketing. My PhD is in Business Ethics.
As a parent, I hear 'I need this!' all the time. Marketing on the TV has also done an excellent job reminding the consumer we 'need' everything RIGHT NOW as well. How doe 'need' apply in real estate? Does it at all? Of course it does.
But lets first remember the difference between NEED and WANT.
Its a usually a costly difference too. (AKA what price of house can I afford?)
I don't 'need' the remote controlled electric fireplace (but TOTALLY want it).
I NEED a bathroom. I want an 3 stall garage...but somehow managed to survive without one for 8 years.
How many 'things' are on your WANTS list? On your NEEDS list?
Are they ranked in priority?
Okay, now you are ready to put it to the test: what is the difference in the cost of your 'needs' and 'wants'?
Its okay, if you still need help, a great real estate agent can help you determine the difference between a valuable feature and personal touch (Davis, 2015).
Google even helped me find a house hunt checklist! If you want help refining your wants and needs list, give us a call. 563.933.6009 (office) or 563.663.3599 (mobile).
It's the American dream, right? So it can't be that hard to do. The process of home ownership has gotten more complex following the 2008 recession (AKA housing crash), especially in the financing of a home purchase (let's face it, most of us do not have enough cash burning a hole in our pocket to buy a home outright). But its not impossible--you just have to be proactive and of course if you don't know the answer--ask someone that can help you find the answer (hint, your real estate agent). The steps to financing a home (yes, the steps look like a finance list, but its for a house purchase) are:
Strengthen your credit score
Figure out what you can afford (this amount can be lower than what the bank says you can afford, if you want more freedom in your budget)
Save for down payment, closing costs (shoot for 20% down, then you avoid mortgage insurance OR see if you quality for a FHA loans as well)
Build a healthy savings account
Get preapproved for a mortgage (and then keep your banker's contact information in your phone!)
Understand the expenses (both one time & recurring)---
One time: loan origination fees, closing costs, recording costs, etc. Recurring: Taxes, assessments, utilities, etc. 7. Buy a house you like Happy House Dreaming!