By Jessica Thiefels
Buying a home will likely be one of the biggest financial transactions you make, and preparing your budget beforehand makes the home buying process much less stressful. The following tips and expert insight can help you get your budget in order before you make the big transaction.
1. Organize Your Finances
You may know how much you have in your checking and savings accounts, but do you know how much you spend on household expenses each month? Or how much high-interest and credit card debt you have? It's important to get a clear idea of where your money goes in order to figure out what you can afford and what your home buying timeline looks like. Personal finance experts at OnStridesuggest breaking down your finances into the following categories:
With your finances categorized and organized, you can start to set goals for how much you need to save, and for how long, in addition to where you need to cut back.
2. Do the Math
Before you set any home-buying goals, do the math to figure out how much you can afford. This will also dictate how much you need to save. Dave Ramsey shares five steps to figure this out:
3. Set Goals
While the overarching goal is to buy a home, setting smaller goals will help you stay on track and feel successful while you make your way there.
As you set goals, remember that you don't need to be solely focused on saving. You may want to set goals for cutting back on spending as well. Here are a few to consider:
4. Write Your Budget
The math has been done, goals have been set and now it's time to write your monthly budget, which should take into account:
In the end, you'll have a total spend for life expenses and a total amount to be saved by month's end. You can use a spreadsheet and do this by hand, or download one of these budgeting apps.
5. Update Weekly; Reassess Regularly
The final step is holding yourself accountable to your goals and regular updates of the budget. If you make a purchase that wasn't planned for, add it to your budget and readjust how much you'll be able to save that month.
Remember that a budget is fluid, and there are many "life things" that will come up and throw it off. That's okay, as long as you stay focused on the goals you've set for yourself. If you go over budget one week, reel it in the following so you can stay on track for the month.
As a homeowner, there are dozens of expensive problems that could arise. Get into a habit of budgeting now so you're prepared for these financial challenges when they inevitably pop up.
Moving can be stressful for every family member – including the four-legged ones. Every animal reacts differently to new living quarters, and temperament has a lot to do with it. Some pets take a move in stride, while others exhibit anxiety or insecurity for days or weeks.
Here are 5 things to consider as the big move approaches and after you're in your new home.
1. A little help from the vet
Ask your veterinarian for recommendations on easing the transition. If your pet is generally anxious or high-strung, it might be worth asking your vet whether a mild calming medication might help during the transition period. It's also not uncommon for vets to prescribe gentle stress relief for during travel.
2. Time to explore
Upon moving in, give your pet time to explore the house gradually, rather than letting it loose to roam at will. Limit it to one area – perhaps the kitchen – for a few hours until it calms down. Show the pet where you've placed its familiar items like the food dish, water bowl and bed. You might want to keep a dog on a leash for an initial home tour. If you have a yard, avoid letting pets out unsupervised for several days until you're sure they can't climb or dig out from under the fence.
3. A walk in the park
Help release anxiety and pent-up energy by take your dog for a walk and sniff through the neighborhood. While people learn about a new place primarily by visual cues, dogs depend on their noses.
4. Helping the feline in your life
Territorial by nature, cats often experience more issues with moving than their canine counterparts. Keep your cat safe in its carrier upon arrival, placing it in a quiet area. When the hubbub dies down, let it out in an enclosed room away from main traffic areas. Provide your cat with familiar objects, such as a bed, litter box and toys. Encourage it to explore the room, perhaps by strategically placing cat treats.
5. Update pet IDs
Amid the hustle and bustle of the move itself, don't forget to update your pet's identification information before you move. This way, if Fluffy or Fido slip out the door, anyone who finds them can easily return them to their new home. Also, some municipalities require licensing within a certain time frame of moving. If your pets are microchipped, contact the registration company and give them the new information.
Looking for a place that's perfect for you AND your pets? RE/MAX can help guide you there.
Owning a home has great financial benefits, yet many continue to rent! Today, let’s look at the financial reasons why owning a home of your own has been a part of the American Dream for as long as America has existed.
Realtor.com recently reported that:
“Buying remains the more attractive option in the long term – that remains the American dream, and it’s true in many markets where renting has become really the shortsighted option… as people get more savings in their pockets, buying becomes the better option.”
What proof exists that owning is financially better than renting?
1. In a previous blog we highlighted the top 5 financial benefits of homeownership:
2. Studies have shown that a homeowner’s net worth is 44x greater than that of a renter.
3. Just a few months ago, we explained that a family that purchased an average-priced home at the beginning of 2018 could build more than $44,000 in family wealth over the next five years.
4. Some argue that renting eliminates the cost of taxes and home repairs, but every potential renter must realize that all the expenses the landlord incurs are already baked into the rent payment– along with a profit margin!!
Owning a home has always been, and will always be, better from a financial standpoint than renting.
Here are five reasons listing your home for sale this spring makes sense.
1. Demand Is Strong
The latest Buyer Traffic Report from the National Association of Realtors (NAR) shows that buyer demand remains very strong throughout the vast majority of the country. These buyers are ready, willing and able to purchase…and are in the market right now! More often than not, multiple buyers are competing with each other to buy a home.
Take advantage of the buyer activity currently in the market.
2. There Is Less Competition Now
Housing inventory has declined year over year for the last 32 months and is still under the 6-month supply needed for a normal housing market. This means that, in the majority of the country, there are not enough homes for sale to satisfy the number of buyers in the market. This is good news for homeowners who have gained equity as their home values have increased. However, additional inventory could be coming to the market soon.
Historically, the average number of years a homeowner stayed in their home was six but has hovered between nine and ten years since 2011. There is a pent-up desire for many homeowners to move as they were unable to sell over the last few years because of a negative equity situation. As home values continue to appreciate, more and more homeowners will be given the freedom to move.
The choices buyers have will continue to increase. Don’t wait until this other inventory comes to market before you decide to sell.
3. The Process Will Be Quicker
Today’s competitive environment has forced buyers to do all they can to stand out from the crowd, including getting pre-approved for their mortgage financing. This makes the entire selling process much faster and much simpler as buyers know exactly what they can afford before home shopping. According to Ellie Mae’s latest Origination Insights Report, the average time it took to close a loan was 45 days.
4. There Will Never Be a Better Time to Move Up
If your next move will be into a premium or luxury home, now is the time to move up! The inventory of homes for sale at these higher price ranges has forced these markets into a buyer’s market. This means that if you are planning on selling a starter or trade-up home, your home will sell quickly, AND you’ll be able to find a premium home to call your own!
Prices are projected to appreciate by 4.8% over the next year according to CoreLogic. If you are moving to a higher-priced home, it will wind up costing you more in raw dollars (both in down payment and mortgage payment) if you wait.
5. It’s Time to Move on With Your Life
Look at the reason you decided to sell in the first place and determine whether it is worth waiting. Is money more important than being with family? Is money more important than your health? Is money more important than having the freedom to go on with your life the way you think you should?
Only you know the answers to the questions above. You have the power to take control of the situation by putting your home on the market. Perhaps the time has come for you and your family to move on and start living the life you desire.
That is what is truly important.