As many of us continue to settle into this new norm of working from home and or staying home as much as possible, now is the time to start setting some new financial routines and goals — especially if you’re looking to buy a new home.
The additional funds you save during this new work-from-home world will help with a larger down payment and may help reduce mortgage insurance premiums if you are planning on putting less than 20% down. You may also have more buying power by reducing credit card and other loan payments per month when it comes time to find your forever home. Firstly, it’s important that if you have not been financially impacted by COVID-19, to continue paying your bills. The relief that has been issued is specifically for those who have lost their jobs and are unable to pay. Next, start looking at how much less you are spending each week, now that you are at home more (like fewer gas station trips, salon visits, grocery store bills, or dining out with family and friends). All of this adds up to savings! I sat and ran some of my own numbers and found that I am saving about $300 a week in travel and dining. Depending on your financial situation, you might find that you are saving even more.
Also, you should be looking at credit card debt as well as your savings ability. Start good habits now that will last well past the end of COVID-19 by choosing to make additional payments to credit card debt to help pay down those high interest rates cards.
Finally, if you have very little or no debt, start or increase your direct deposit or auto transfer deposits into savings. The more discipline we have now will help keep the focus on financial stability.
Raveis Mortgage is always here to help answer questions you have about how to best prepare for your next purchase. Contact one of our many Executive Mortgage Bankers and stay safe!
By Linda Dorsey, Executive Vice President of William Raveis Mortgage