How often do you try to save money for a vacation, birthday/Christmas presents, a new car, etc? For many of us, this task seems to be increasingly difficult especially in these pandemic days. Trust me when I say that you are Not alone. Even dedicated savers have setbacks or unexpected problems. HELLO? Who really planned on the entire world shutting down for this long? I know it can be difficult visualizing how putting back $100+/month can add up to a new house. Your big dreams of owning a new home gets pushed back, yet again, so you can afford more immediate needs.

 

     We all know the dreaded tax deadline (April 15) will be here before we know it. But, for some of us, the refund can’t come quick enough. Before you take that needed vacation to the beach where you still have to wear a mask and socially distance, or go to the nearest electronics store/Amazon to buy the newest big screen 4k super extravagant T.V., consider how your tax refund could help you achieve your homeownership goals. Many Americans will see a lump sum on their refund. Take that lump sum and add it to what you have been saving (or just some of that lump sum) and use it towards the following things:

 

Down Payment- With the options and services that lenders have now, the average of down payments for qualified borrowers is down. FreddieMac reports “the average down payment is between 5 to 10% — not 20%, as a lot of people assume. WAIT...there’s more. How about over 2,000+ programs across the country that can help you save on down payments AND closing costs. And on top of all of those, the state, county, and city governments also provide financial assistance to those who qualify. Reach out to your lender to see what’s available to you or give me a call (615-785-5478) and I can point you to some trusted lenders that my clients have had great success with in the past.


Closing Costs- You just read in the paragraph above that there are financial assistance programs that can help with down payments and closing costs. However, don’t think for one minute that you will be getting a home with no out of pocket expenses. Remember that’s why you were saving in the first place. Closing costs are paid to 3rd party people who have either performed services (such as the Title Company and lender) on your loan, and to people who have charged for various other items. Closing costs include, but is not limited to: Loan Processing fees, Loan Origination fees, Title Company closing fees/Attorney fees, Tax Services Fees, Appraisal fees, PUD fees, Courier fees, Base Commission fees and Warranty Company fees. Now, let me repeat myself before you start stressing again, there are financial assistance programs that can help with down payments and closing costs. 


Increase Your Credit Score- 3 major credit bureaus (Experian, Equifax and TransUnion) produce comparable credit scores using some version of FICO, the industry standard developed originally by Fair Isaac and Company. This 3 digit number (ranging from 300-900) is a system of points earned based on your credit history and is used by most lenders to determine your qualifications for a loan. Late payments, debt to credit ratio, total debt amount, and age of accounts (the older the better) can all influence your score. Guess what a low score can do?  It can limit your loan options. Who needs another hurdle to jump over? It is beneficial to see what you can do to increase your credit score before you apply for a mortgage. Working with a professional to pay off a few debts can lower the cost of the loan and allow more of your monthly payment to go toward the home itself instead of interest.