Do you wish the rent you are paying was going into your future? Unfortunately, the down payment required to buy a home prevents people from switching from renter to homeowner. Climbing the “down payment mountain” isn’t impossible. It’s about breaking your essential, challenging, audacious goal into practical steps. 

Saving for a down payment on a home can be challenging, especially if you need help figuring out where to start. But saving enough for a down payment on your dream home is possible with some creativity and discipline. 

Here are some tips for conquering saving for a down payment:

Find out where your money goes. You can only start saving money if you know where you’re spending the money. Track each expenditure for a month or two, no matter how small. Get an objective picture of where you’re spending the cash.

Get specific about how much you need to save. Even if you’re not 100% sure of your down payment amount, it’s good to start doing a little math to figure out how much you need to save. Pick a dollar amount and a timeline to hit that dollar amount. For example, a $25,000 down payment in two years totals $1,041/month. Sound unrealistic? Either scale down your home desires to something smaller or scale up your timeline. If you can wait three years, that monthly savings goal drops to $694/month.

Determine the big moves you can make. How much would you save in rent if you’re in a three-bedroom apartment and can handle the idea of scaling down to a one-bedroom one? What about going from two cars down to one? If you can make them work, these sacrifices will significantly impact your savings goals.

Establish a separate savings account. Having a separate account with a “hands-off” attitude is essential. Keep your dream home money from mingling with your regular checking or savings account. Establish a high-yield savings account with a credit union or money market account to protect and build your savings. Automating your savings is one of the best ways to save for a down payment. This way, you’ll never have to think about it – the money will be there when you’re ready to buy.

Pretend you already have a house payment. Once you determine the approximate amount of a new house payment, start making that payment now. This trick is two-fold. Instead of paying the bank, pay your savings account. It will help you accumulate a down payment faster and ensure you can afford the new house payment.

Mind the risky investment schemes. Once you have a little momentum, it may be tempting to take some of that cash and invest it to make it grow faster. Be prudent about this, as investing in stocks, startups, or high-yield funds can quickly decimate your savings. Be conservative.

Of course, knowing how much home you want to buy is essential when saving up for your down payment. I’m happy to give you an idea of what homes are selling for in your area. In the meantime, check out the various neighborhoods in the Prescott Quad City area. We have an up-to-date list of homes for sale in the area.

Feel free to get in touch at any time if you have questions (928) 830-6976.

We love the multitude of TV shows, taking a worn-down home and flipping it. Seeing an old house tuned up always grabs my attention. Hands down, before and after pictures are my favorite part! Have you recently fallen in love with a “flipped” home? Does the idea of moving into a cleanly renovated space excite you? Before you leap into closing on the house, there are questions and precautions you may want to consider.

“Flipped” or “rehabbed” homes are properties that real estate investors buy to renovate and sell for a profit. Sometimes these homes have been secured after short sales, foreclosures, surviving relatives, or at auctions. For real estate investors, part of the profit depends on how fast and affordably they can renovate the property. There’s even more pressure to make sure a home is ready to sell as fast as possible in seller’s markets.

A flipped home is enticing and, many times, a solid investment. There’s nothing wrong with purchasing a flipped house, but before you sign on the line, you will want to ensure you know a bit about the home’s history. Make sure to dig a little deeper.

Before Buying a Flipped Home

Here are some questions to ask:

1. Find out the condition of the house when the flipper purchased it. What was the shape of the home before the renovation? Was it just outdated? Vacant? Did squatters trash it?

2. What deficiencies, damage, or other defects did the home have when the flipper bought it? Ask for a list of issues.

3. Who did the work on the house during the renovation? Contractors? Handymen? Did the flipper do the work personally? Were the appropriate permits secured? Are there invoices that detail the work completed and the money spent on the repairs?

4. Was anything left “as is”? What issues were left uncompleted that may have been deemed too small or not vital to the renovation?

5. What was the legal history of the transfer of ownership? Short sales and foreclosures might have legal obligations on the flipper or other liens.

All State Insurance has provided a great article on this topic. All State advises having an inspection to determine if shortcuts were made. Along with this, they suggest researching the history of the house and researching the seller. Is their business flipping homes? Is this their first-time flipping homes?

You shouldn’t shy away from a flipped home that you love, but don’t go into the situation blind. I have experience working with buyers who have purchased flipped homes, and I’d be happy to help you navigate the questions. Let’s talk (928) 830-6976!

Bad credit can be disheartening, and many believe that bad credit can disqualify you from buying a house. While it can be difficult, buying a home with bad credit is possible. Below I have put together tips on what steps you can take to boost your prospects of buying a home. If you’re not in the position to buy today, preparing for what could be available in the future is a strategy that will pay off in the long run.

Check your Credit Score

Checking your credit score is easy to do. Each nationwide credit reporting company, Equifax, Experian, and TransUnion, is required to provide you with a free copy of your credit report, at your request, once every 12 months.

Along with this, check for errors in your credit report. If you find an error, the best way to attempt a correction is through a dispute letter. Dispute letters allow you to request a fix by contacting the reporting agency. Though it may take a little time to remove the errors, cleaning up these mistakes can have a direct and favorable effect on your credit score, helping you secure lower interest rates and better terms.

Larger Down Payment

Down payment assistance can be challenging to obtain with a bad credit score. You’ll have to help your odds of pre-approval by proving you have 10% down to put on your home. That 10% is beneficial if your credit score is sub-550. Above 550, you might be able to land an FHA loan with only 3.5% in equity.

Need help saving for a down payment? Here are some tips for conquering saving for a down payment:

• Find out where your money goes and adjust what are “needs” versus “wants.”
• Get specific about how much you need to create a visible goal.
• Determine the big moves you can make to change your financial picture.
• Set up a separate savings account, so your down payment is out-of-sight and out of mind.
• Pretend you already have a house payment by placing that amount in saving each month.

Make Moves to Rebuild Your Credit

You don’t have to be perfect to improve your access to better mortgage terms. First, pay down your credit card balances. Then identify any outstanding debts or collections you can manage to get cleared through full payment or a negotiated settlement. Focus on doing what you can to bring your debt-to-income ratio below 45%. If you push your rating above 620, you’ll not only get closer to better terms, but you’ll generally experience less scrutiny during the approval process.

Don’t Force It

Suppose you’ve experienced a bankruptcy, foreclosure, or short sale scenario. In that case, it may not be possible for you to secure a mortgage for at least three years (sometimes two, depending on the situation). Use this time to work on the tips above!

If you’d like to begin hunting for your next home, I am happy to help guide you. Or, if you need a referral to a reputable mortgage professional, get in touch! I have a network of trusted folks I work with every year.

The Plane Team
(928) 860-6976

Understanding “Price Per Square Foot”

Price per square foot is a real estate concept that is easy to understand but equally easy to misuse. The formula is pretty simple: To determine the price per square foot, you divide the house’s sale price by the house’s square footage.

Price per square foot helps look at broad market comparisons, such as comparing one entire metro area to another or looking at an area’s average change over time.  It is not, however, accurate in figuring out the value of your home. 

Why? Unfortunately, the price per square foot fails to consider the most important factors when pricing a home.

First and foremost, it makes assumptions about the home’s amenities. We all know the quality of materials used in home construction and the condition of the home’s appliances and other features can dramatically impact a home’s value. A kitchen with Italian marble surfaces versus one with pressboard countertops will have different values. The price per square foot in a given neighborhood will blend these homes and produce an average.

Second, the price per square foot assumes locations are identical, but in almost any metro area, there are up-and-coming neighborhoods and neighborhoods in decline. The price per square foot near an abandoned industrial zone will vary considerably from one near a well-established downtown district with an excellent walkability score.

Third, even the simple calculation of price per square foot can vary depending on the items included. Which square footage is valid if one has a garage converted into an in-law suite and another home doesn’t? And what about the house or lot size? Sometimes above or below-grade lots can also influence the price per square foot.

If you are looking for a home that represents good value for your money, then the price per square foot can be a helpful metric. However, it is essential to remember that the price per square foot can vary widely depending on the location of the home, the size of the home, and other factors. As such, it should only be used as one piece of information when deciding which home to purchase.

Resources and Tools

Price per Square Foot helps compare homes, but when it comes time to set a value for your home, we have other tools to help you determine that number.

When valuing a home, we work hard to get an accurate value considering dozens and dozens of factors. If you would like an accurate estimation of your home’s value in its current condition and location, we would be happy to help. We have resources and tools that consider numerous variables to arrive at an accurate value. Get in touch today, and we will show you what goes into determining the optimal value for your home.

Dena Plane

(928) 830-6976