Saving up for the house of your dreams will take dedication and patience. There’s a lot to keep in mind. Here are 3 of the most important things.
Find Out Your Home’s Current Value
Knowledge is power. How much is your home worth right now, compared to when you first bought it? In most cases, its value increases over time. That’s your starting point for the new home. The amount you make on the sale of your starter home combined with money you’ve been saving becomes the basis for your forever home. If your home’s current value is $125,000. When you sell that house, you’ll have between 2–5% in closing and another 6% in fees for the real estate agent who helped you sell it.
- $125,000 (home value) minus $6,250 (5% closing costs)
- minus $7,500 (6% agent fees)
- = $111,250 equity for your new home
When the timing is right, you can estimate clearing $111,000 from selling your house. That’s a great down payment on your forever home.
Create a Budget
It’s easy to say you’re saving up for you dream, but actually committing to that goal is another story. A great place to start is setting aside a time at the beginning of each month to budget out all of your big expenses — think mortgage or rent, student loans, utility bills, car payments, etc. Next, factor in non-negotiable expenses like gas and grocery bills. The money you have left over is up to you — do you spend it on a shopping spree, fancy dinner or stash it away in your dream fund? Every month you stick to your budget is another month closer to achieving your dream!
Record Your Expenses
The first step in setting up your dream fund? Figuring out where your money is currently going. Write down all your expenses and purchases for a month in a journal — or make it easy with an app like Mint or YNAB. Seeing the amount of money you spend in a day can be a real eye-opener. Once you have an understanding of where your money is going, you can begin to find areas that can be downsized to make room for your dream!
RE/MAX Realty Professionals—The Results Team—is ready to help you buy or sell your home! Visit www.calltheresultsteam.com. Or call Lesa Miller at 812-360-3863 and Jenivee Schoenheit at 317-258-0995.