Dr. Martin Luther King, Jr. inspired a powerful movement with his famous “I Have a Dream” speech in 1963. Today, his message encourages many of us to think about our own dreams and goals. One of the most common goals is buying a home — a place where our families can grow and flourish.
Buying a Home
If you are dreaming of buying a home this year, contact a Real Estate agent at Wenzel Select Properties to help you understand what goes into buying a home. Below are a few questions to consider when you are in the market to buy a home.
How Much Can You Afford?
Buying a home is not a process one should enter into lightly. You should consider the following:
- How long you plan on living in an area?
- What school districts do you prefer?
- How will you commute to work?
- How much you can afford to spend?
Before you start the process of buying a home, you’ll also need to get pre-qualified for a mortgage. Mortgage lenders will evaluate several factors, one of which is your credit history. They’ll want to see how well you’ve been able to minimize past debts. Make sure you have been paying your student loans, credit cards, and car loans on time. Most Real Estate agents work with mortgage lenders they trust and can refer you to a lender.
According to ConsumerReports.org, “Financial planners recommend limiting the amount you spend on housing to 25 percent of your monthly budget.”
How Much Do You Need for a Down Payment?
In addition to knowing how much you can afford on a monthly mortgage, understanding how much you’ll need for a down payment is another critical step. Thankfully, there are many different options and resources in the market to potentially reduce the amount you may think you need to put down upfront.
If you’re concerned about saving for a down payment, start small and be consistent. A little bit each month goes a long way. Systematically invest a portion of your monthly paycheck into a separate savings account, money market account or a Certificate of Deposits (CD). Talk to your bank or financial advisor. Over time, systematically investing adds up. By investing $50 a month accumulates to $600 a year and $3,000 after five years, plus interest that has compounded.
Before you know it, you’ll have enough for a down payment if you are disciplined.
As tempting as it is to stop for a cup of coffee each morning at your favorite local shop, consider having a cup at home and putting the money into your savings. It’s the little things that count, so start trying to live on a slightly tighter budget if you aren’t doing so already. A budget will allow you to save more for your down payment and help you pay down other debts to improve your credit score.
A survey of Millennial spending shows, “70 percent of would-be first-time homebuyers will cut spending on spa days, shopping and going to the movies in exchange for purchasing a home within the next year.”
While you don’t need to cut all of the fun out of your current lifestyle, making smarter choices and limiting your spending in areas where you can slim down will make a big difference.
Downers Grove Real Estate Company
If buying a home is your dream this year, take a good look at what you can prioritize to help you get there. Let’s get together today to discuss the best steps you can take to start the process. Contact a Real Estate agent at Wenzel Select Properties today! Call us at (630) 430-4790 or contact Wenzel Select Properties by email.
Wenzel Select Properties is located at 4941 Main Street in Downers Grove, Illinois. Our real estate office is in the heart of downtown Downers Grove. We are just minutes away from Interstates 88, 355, 55, 290 and 294. We are available to meet with you 7 days a week – Monday through Sunday.