January 03, 2023

If you’re gearing up to purchase a home in 2024, understanding the ins and outs of budgeting and saving is essential. The process might seem daunting, but with the right knowledge and guidance from trusted mortgage professionals, you can navigate it smoothly. Here’s a breakdown of key aspects to consider:

1. Down Payment Options

Saving for a down payment is a crucial step in buying a home. Contrary to the common belief that a 20% down payment is mandatory, your specific situation and goals determine the right amount. Collaborate with reliable real estate professionals to explore various loan types and down payment assistance programs tailored to your needs. We have debunked the myth that 20% is a requirement and emphasize the importance of aligning your down payment with your savings and goals.

2. Closing Costs Planning

Budgeting for closing costs is equally important, as they typically range from 2 to 5 percent of the mortgage. These costs include fees payable to different parties involved in the real estate transaction. To be financially prepared for this expense, partner with a reputable lender who can provide insights into the specific closing costs you may encounter. According to Bankrate, understanding these costs is vital whether you’re refinancing or buying a new home.

3. Earnest Money Deposit (EMD)

Consider saving for an earnest money deposit (EMD), an amount paid as a demonstration of your commitment when making an offer on a house. Realtor.com suggests an EMD is usually between 1% and 2% of the total home price, functioning as a credit towards your down payment and closing costs. While not mandatory, it signals to the seller that you’re a serious buyer. Working closely with a real estate advisor ensures you understand the local requirements and make informed decisions during the buying process.

Conclusion

Informed decision-making is crucial when it comes to saving for a home. Connecting with a mortgage expert will provide you with valuable insights and answers to guide you through the entire process. Stay informed, make the right moves, and feel confident about your home- buying journey.