Saving up for a downpayment on your first home can seem daunting. In Hoboken and Jersey City, where the real estate market is competitive and fast-paced, it can feel even more challenging. 

But don’t be discouraged! With some preparation (and the right real estate professional by your side), buying a home can be within reach before you know it. 

Your first step: create a financial plan so you can afford to buy! Keep reading to find out how. 

Take a look at Your Current Savings

Many buyers speak to the pain points of saving for a downpayment and closing costs - but oftentimes, if you have saved up enough to rent, you’re well on your way to buying.

Renting in Hudson County requires good credit, a realtor fee, security deposit, and first month’s rent. All of those fees, plus any miscellaneous costs to move, requires a significant amount of savings. Many times, that money can cover the cost of a downpayment. 

Decide on Your Monthly Budget

Next, take a look at your current monthly income and expenses. How much are you spending on housing? Can you afford to increase your monthly payment, or are you comfortable with what you are currently paying? 

When pre-approved for a mortgage, buyers are given an estimated purchase price. For example, you might be approved for a $600,000 loan. But when you break down your monthly costs and decide on a budget, you could realize that you are more comfortable with the monthly costs for a $500,000 home. 

Know Your Options

When you have looked at your savings and calculated your desired monthly budget, meet with a mortgage lender to determine your options. You will learn what type of loan you qualify for and how much you preapproved for. Your lender can also help answer questions about how much home insurance and private mortgage insurance will cost your price point. 

Pay Down Debts and Create a Savings Plan

If you realize you still need another year or two to save up, don’t leave your savings to chance! Create a plan to pay down your debts. This will help you increase your credit score, which aids in securing a loan with low-interest rates. If you are serious about saving, determine what expenses you can cut out and create a savings plan you can stick to. 

If you’ve gone through your finances and are ready to begin your search, contact us today!