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How To Save For Your First Home

Even if you’re not planning to buy a house for several years, you’ve probably started thinking about how to save for the down payment. This is not the same as saving for retirement, where the funds you stash away won’t be accessed for many more years, your down payment is a large sum of money that you’ll need to access in the near future.

In these steps that follow below, we’ll show you how to start saving for your first home, the smartest way possible.

First, you must know how much you’ll need to save. Sitting down with a Realtor or a mortgage lender who will let you know how much of a mortgage you can qualify for is a good place to start or you yourself can begin by following a few simple calculations.

Calculate A Feasible Budget & Savings Goal

In general, your housing expense should not exceed 28 percent of your stable monthly income. That means if your income is $5,000 per month, you can safely allocate $1,400 of that ($5,000 x .28) to a future house payment.

The $1,400 will include mortgage Principal, Interest, real estate Taxes, homeowners Insurance (or PITI), and homeowner’s association (HOA) dues, if any.

Mortgage rates vary but for our example, 4.5 percent, this will translate into a mortgage loan amount of about $177,500.

To arrive at the amount that you can afford to pay for a house, you’ll have to add the down payment on top of that $177,500.  In the tightly regulated mortgage lending market today, you should expect to make a 20 percent down payment on your house.   In order to avoid paying PMI – Private mortgage insurance to the lender, it is recommended and generally expected to make a 20 percent down payment on your house.  It is not a requirement; however, but this will give you the most benefit to pay less in interest.

You can certainly put down less, but you will likely be paying a higher rate of interest and, if you have any kind of credit issues, you may not be able to get a mortgage at all.

So, let’s work with our example of a mortgage for $177,500, and making a provision for a 20 percent down payment, we can calculate the actual down payment dollar amount this way:

$177,500 divided by .80 = $221,875, minus the $177,500 mortgage loan = $44,375, or rounded up, $45,000

By Rounding the numbers up, this means you will be purchasing a house for $222,000, with a $177,500 mortgage, and a down payment of about $45,000.

Finding A Mortgage Lender in DeLand

Greene Realty & Property Management can recommend a mortgage lender who can perform specific calculations for you, based on your own financial circumstances. This illustration is for example purposes only, and so that we can carry that $45,000 number forward for more calculations. 

Determine Your Time Frame

Step two,  is to determine your timeframe. If you plan on purchasing a home in five years, you will have to save $9,000 per year ($45,000 divided by five years).  Of course, the shorter your timeframe, the higher your annual savings goal will be.

Since the money that you are saving for the down payment on a house has a definite purpose, you should save your money in super-safe vehicles like a boring old savings account or a certificate of deposit.  This will allow you to get to this money easily when the time is right.

It is now time to clear some room in your budget to make sure that your savings goal is doable. That means you may have to earn additional income, cut back on expenses, or both.

By making room in your budget, this can help you save the kind of money you’ll need for your down payment, and it will also prepare you for managing the type of tighter budget that homeownership requires. Embrace it for all it’s worth!

Plan Your Savings Strategy

Most of us aren’t really savers, by nature, so, you’ll need to automate the savings process. You may try some sort of payroll savings plan. Just like your 401(k) plan, try allocating a certain percentage or dollar amount of your regular pay directly into a savings account or money market account dedicated to accumulating the funds for your down payment.

It not only makes the process automatic, but it also makes it invisible. Money moves from your paycheck to your dedicated savings account without you even seeing it happen. It will remove both the temptation and ability to spend the money on other things.

You can shorten the process and reach your goals sooner by using income-tax refunds, gifts received, bonuses or large commission checks, or even the sale of personal assets.  Regularly depositing a few extra thousand dollars per year in “windfall” money, can chop a couple of years off your savings time.

It is important to build flexibility into your savings plan.  There will always be unforeseeable demands on your budget like car repairs, medical expenses or even a loss of a job.  You will have to be ready with an emergency fund before you even start saving for your down payment.  

In Summary

Buying a home can be a long process.  It will require a good chunk of your savings but think of it all as preparation for homeownership. You’ll have all the expenses you currently have after you buy your home too, but you’ll also have large expenses related to the home itself. Think of saving for your down payment as a dry run to prepare both your finances and your psyche for the expenses that homeownership brings.  The benefit of your OWN home surely out-weighs any negative.

If you are a tenant with Green Property Management, you will receive an added benefit for working with us as your buyer’s agent/realtor; a cash credit back to you towards the purchase of your home.  This is less money you have to save, just for continuing to work with Greene Realty & Property Management.  Call our office for details on 386-734-2200.

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Frequently Asked Questions

Landlord FAQ's
  • How do landlords view documents and reports?

    Landlords need a place to securely access all owner statements and other important documents. Including the signed Management Agreement, HOA documents if necessary. Greene Realty provides all clients in any location throughout West Volusia a secure online platform to login, view and manage all their statements and reports.

    Using your online portal is easy and efficient. Take ownership of your property anywhere in and around West Volusia.

    All West Volusia property tax records will be mailed to you yearly. In addition, you get photos and a report of your home inspections (if added).

  • How do we handle evictions?

    This is never the desired outcome but can be an unfortunate circumstance. Regardless of what city your property is in within West Volusia, FL, a concern of any homeowner is being stuck with a tenant who is breaking the terms of their lease. Greene Property Management always holds the tenant responsible for their legal obligation and will work for the homeowner to minimize any vulnerability.

    Should an eviction become necessary, we will do our best to reduce your risk as a landlord by following all state laws to ensure a rapid, minimal cost, decision. Staying abreast of local law changes and regulations is paramount to a successful eviction. If you want to know how to evict a current tenant at your property, even if it is not currently managed by Greene, we are happy to help. Please use the contact form here to submit your eviction inquiry.

  • How do I check my account balance?

    Log in to your Resident/Owner Portal and click the Payment tab. This will show your payment history and charges in your ledger.

  • Does Greene Property Management inspect my rental?

    GPM does inspect each property. We inspect based on the Management Plan selected, which ranges from 2-4 times per year. Tenants are given a minimum of 24 hours’ notice prior to any property inspection. We take out and inside pictures for documentation. Additional inspections can be requested for a small fee.

Tenant FAQ's
  • How can I become a tenant with Greene?

    1. Work with a Team Greene Property Manager to find your perfect place to live.

    2. Complete and application on our website.  All those 18 years and older living in the property must complete an application and screening.  A $75 Non-refundable fee per application must be included. These fees are non-refundable. Our application process can take 3-5 business days.

    3. You must have proof of income.  Your income must equal at least 3 times the monthly rent amount.  Examples of income verification include, but are not limited to: 3 consecutive paystubs, 3 months of payroll reports from employer, current proof of government income, proof of retirement, liquid assets (bank accounts, stocks), spousal support, legal verifiable income.

    4.  Credit must be  least a 600 credit score and no late payments in the last three months.  Provide 3 years of rental history with contact numbers. Criminal history will be assessed on an individual basis.  We base our decision on a concern for the safety of other residents and staff. Any conviction for the manufacturing and distribution of illegal drugs will result in application denial.

    5.  You must be willing to start the lease within 30 days of applying.  We will only process completed applications. Our application process generally takes three business days from the day you provide us a complete application and all required documents.  We make no guarantee as to the time it will take to process your application. This varies based on the responsiveness of your landlords and employers and other business demands.

    6.  Be honest and truthful in your application and answer all questions.  Falsification of facts or withholding information is cause for denial and or eviction later.

    7. We strongly encourage you to view the property prior to applying.

    8.  If approved, GPM will need a minimum of 2 days to prepare the property prior to move in.

    9.  Pets—Check to confirm pets are considered in the rental.  You must submit a pet application. No pet will be considered without a pet application.  Any guide dog or other assistance animal will be permitted upon verification. Be prepared to verify vaccination records and pets current weight.  If a pet is approved it is understood that the tenant will carry insurance to cover the animal.

    10.  Students/applicants who do not currently have income must provide a guarantor.  The guarantor must complete an application and provide all verifications necessary to qualify.  The guarantor must live in the USA and must assume financial responsibility of the lease, including property damage.  All roommates must have a guarantor or all qualify without guarantors.

    11. We must have a state issued photo ID for each applicant.  Such as a driver’s license, passport, military ID for each applicant and co-applicant.

    12.  First qualified applicant to sign and pay $500 to hold the property, will be the first to rent.  We will only hold properties with a $500 non-refundable deposit . This will be applied to your 1st months rent at the time of move in.

  • How do we handle evictions?

    This is never the desired outcome but can be an unfortunate circumstance. Regardless of what city your property is in within West Volusia, FL, a concern of any homeowner is being stuck with a tenant who is breaking the terms of their lease. Greene Property Management always holds the tenant responsible for their legal obligation and will work for the homeowner to minimize any vulnerability.

    Should an eviction become necessary, we will do our best to reduce your risk as a landlord by following all state laws to ensure a rapid, minimal cost, decision. Staying abreast of local law changes and regulations is paramount to a successful eviction. If you want to know how to evict a current tenant at your property, even if it is not currently managed by Greene, we are happy to help. Please use the contact form here to submit your eviction inquiry.

  • How do I check my account balance?

    Log in to your Resident/Owner Portal and click the Payment tab. This will show your payment history and charges in your ledger.

  • If something needs repair in my rental what should I do?

    Log into your Resident Portal and enter a Maintenance Request. By explaining in full detail the situation, we can address this repair as quickly as possible. Your Resident Portal is the most direct way to get information to GPM.

  • What happens when I move out?

    Be sure to let GPM know 30 days in advance, in writing. An email will be sent with move out procedures to follow to ensure you receive your entire security deposit back.

  • How do I get Renter’s Insurance?

    Log into your Resident Portal and sign up for Renter Insurance. The cost starts at $12 per month and is the most convenient way to receive coverage. You may seek outside insurance options but please call the office with proof of insurance. All Tenants renting with GPM MUST have insurance.

  • Does Greene Property Management inspect my rental?

    GPM does inspect each property. We inspect based on the Management Plan selected, which ranges from 2-4 times per year. Tenants are given a minimum of 24 hours’ notice prior to any property inspection. We take out and inside pictures for documentation. Additional inspections can be requested for a small fee.

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