PLANNING :: How to Plan for Your Future Dream Home Now

 

We have lived in the same neighborhood for almost 20 years now!  I guess you could say we like the area!  We rented in the neighborhood for many years and made the decision to buy about 13 years ago and I can still remember the stress and anguish involved in making this decision!  Buying a home is right up there with life’s major stresses but there are resources to help you  – from how much home you can afford, to what types loans are available to what types of documents you will need.

 

 

Saving to Buy a Home:

There are steps you can take each month to put money aside for your new home. These are some steps we took in order to save up to buy our first home.

Have a heart-to-heart talk:

Sit down with your partner and see how much money could be saved each month to be put aside.  See if you can’t get rid of some extra expenses (we recently got rid of cable as we can stream everything we want on Netflix!), and we also cut back on eating out.  These two things have helped save us money each month!  See where you could trim the excess to put into your future home down payment.

Interview and Choose a Financial Planner:

Ask your friends and family and see if they have a good financial planner that they could recommend to you.  We interviewed several financial planners before deciding on one.  You want to make sure that your goals – home ownership, investment risk tolerance, etc., are in-line with their ideas of how they would like to invest your money.

Our financial planner was a big help when we were going through the process of looking to purchase a home as I was so nervous about taking this big step.  You can never really know what the market will do here in Southern California and we were worried that we were buying at the top of the market.  Talk to qualified real estate agents to get their thoughts as well!  We eventually made the jump to buy after something our financial planner said to us after being on the fence for so long!  His thoughts were if we were planning on staying in this home at least 5 years to 10 years, we would be able to sit out any highs or lows in the marketplace.  He was right and we just celebrated our 13th year here in the house!

Free Money:

Make sure to match your 401K contributions that your company might make.  My husband had worked for a company that would match what he put into his 401K each month (up to a percent).  We would scrimp and save to put this money in each month because, really, it is free money from the company, so we went without in other areas to get this money into his 401K each month.  It adds up pretty quickly so make sure to check to see if your company or your husband’s offers this.

Check your FICO scores:

You can check online to see what you and your husband’s FICO scores are and if you see that they could use some improvement, then take your time to get it as high as possible before you purchase a home as your rates, amount of down payment, etc., will be affected by this score.  We disputed a couple things on our reports and were able to get them cleared off.  Check online resources to see what things you can do to improve your score.

 

 

Learning about the Home Buying Process:

The Capital One Home Loans Online Neighborhood is a great place to start learning about what it take to buy a home.  From loans you can afford to documents you need to apply for a mortgage.

• The Capital One Home Loans Online Neighborhood is a free online resource where you can learn all about home buying. They have gathered easy-to-understand articles and helpful videos, as well as information about Capital One’s Home Loans offerings.
• Their friendly online neighborhood covers all stages of the home buying process – from deciding whether now is even the right time to buy and how much home you can afford, to the documents you need to apply for a mortgage.
• Buying a home is an important process, but certainly not a simple one – Capital One’s new online resource lays the groundwork with a glossary of terms you should know, an overview of the loans available and more.

 

Some of the tips Capital One Home Loans Provides first-time buyers include:

• One of the first steps is figuring out how much home you can afford. Start by sticking to the right price range. A rule of thumb is to look at houses that are 2.5 times your annual salary.
• Ideally, your monthly housing payment shouldn’t be more than 28 percent of your gross household monthly income.
• Use an online mortgage calculator to help figure out what you can afford.

• Your financial history is important too. Lenders look at income, assets, job history, credit score, total debt and how much you’re willing to put down as a down payment.
• The traditional estimate for a down payment is 20 percent of the purchase price of the house, which can lower your monthly payments and avoid mortgage insurance better than a lower down payment.

• If you’re interested in learning more about Capital One Home Loans and how we can help you get home, visit https://www.capitalone.com/home-loans/direct/learning-center or call us at 855-900-8886.

I was selected for this opportunity as a member of Clever Girls and the content and opinions expressed here are all my own.

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