• Save for a House

    That beautiful house in your neighborhood finally went up for sale. You know the one – corner lot, mature trees, that stunning wrap-around porch, and those majestic windows! It’s your dream home, and there it is … ready for you to make your offer. Except for one small problem: you didn’t save money for a down payment. Suddenly, the dream is slipping through your fingers.

    But wait. Let’s rewind. Months (or even years) before that home ever goes on the market, what if you’d been saving? The house goes on the market. Those trees! That porch! But this time, instead of realizing your dream was nothing more than wistful fantasy, you have enough money saved for a house and then some. You thank years-ago you for making the smart decision to start saving. Now, your dream home is a reality.

    With a few small changes in your spending, you could save enough money so when the right house comes along, you’re ready. Let’s start by figuring out how much money you’ll need.

    We buy houses in Rocklin

    How Much Should I Save for a House?

    You’ve probably always heard that you need 20 percent down when buying a house. While that’s a good rule of thumb, it isn’t entirely true. Having 20 percent down would save you from having to get private mortgage insurance (PMI). This insurance protects the lender and mortgage investor if you default on your mortgage. So, while you may need to pay for this insurance, you can buy a house for very little down – even as little as three percent. The trick is figuring out how much house you can afford, then determining how much you’ll want to put down from there.

    Be realistic. If you are struggling with your current rent payments, you wouldn’t want your mortgage payments to be much more than that amount. Review your budget and determine how much per month you can afford to pay. Make sure you factor in monthly expenses like credit cards, car payments, utilities, and groceries. Your utility bills will likely increase if you are currently renting an apartment. Generally, it is suggested that apartment renters budget $240 per month for utilities like electricity, water, gas, and internet. For homeowners, that increases to about $400 per month.

    Next, research the neighborhoods where you think you’ll want to buy a house. If, for example, homes in your desired neighborhood sell for an average price of $300,000 and you want your mortgage payments to be around $1,200 per month, you’ll need to have a down payment of about $30,000 (depending on the interest rate and the length of the loan). While it sounds like a lot, remember: the more you pay in the beginning, the less you’ll need to borrow and the less you’ll have to pay over time. Putting more down could also lower your interest rate. Remember to factor in other costs as well, such as agent fees, taxes, and closing costs.

    Pay Down Your Debt

    If you have a lot of credit cards and they all have a balance, start working on paying those off. Even reducing your balance by $1,000 could lower your interest rate and save you $100 or more per year on interest. Start with the credit card with the lowest balance and concentrate on paying that off. Pay the minimum on the rest of your cards. Once that card is paid off, pay what would have been the minimum for that card on the next card, in addition to the regular minimum payment. Keep doing this until all of those minimum payments are going toward your largest credit card balance. This is called the “debt snowball,” where you eliminate one debt at a time and apply that money to the next debt.

    Examine your budget and find other monthly payments you can eliminate – for example, subscription services (especially if they are automatically deducted from your account). If you rarely use it, ditch the gym membership and work out at home or at a local park with a jogging trail.

    Get Acquainted with Your Kitchen

    Whether it’s ordering from your favorite restaurant or buying fast food on your lunch break, you could be spending way more on food than you realize. That $20 meal delivered from your favorite restaurant would have cost you about $4 to cook at home. On average, it’s about five times more expensive to order from a restaurant than it is to cook the meal yourself. The leftovers from your home-cooked meal will make a great lunch – just toss the leftovers in a Tupperware and pop it into the breakroom microwave at work. (Yes, even if it’s fish. Your co-workers will forgive you eventually.)

    Before heading to the grocery store, make a list. Plan your meals for the week, determine which ingredients you’ll need, and shop from that list. Grocery stores are good at getting shoppers to impulse buy, so make sure you only get what’s on your list. If you can avoid it, don’t shop on weekends. Instead, try to do your grocery shopping in the middle of the week – that’s when stores have the best sales. If you use coupons, you can save even more.

    Find Ways to Cut Expenses

    While you may find joy in buying trading cards or lottery tickets, you’re probably spending more on these habits than you realize. This also applies to other habits like smoking or drinking (whether it’s beer or diet Coke). Maybe you are a chocolate fiend and have a subscription to an online chocolatier that sends you a box of delicious goodies once a month. You don’t have to give up these habits completely, but setting a limit for yourself (say, only one box of cards per week instead of five) will amount to more money than you may realize. Take that money and put it into your savings account.

    Another great way to save money: unplug your electronics! Just unplugging your appliances and other devices when they aren’t in use can save you up to $100 a year. While you’re at it, switch out those old lightbulbs with energy-efficient ones, make sure you are replacing your air filters regularly, and save water by taking shorter showers and turning off the sink while you brush your teeth.

    Save Money Automatically

    Check and see if your bank will allow you to set up an automatic withdrawal every payday. Since you are saving money by paying down your debt and cutting expenses, this is a painless way to increase your savings. Even if it’s just $25 per paycheck, it adds up fast. Some banks or apps will round up your purchases and put the difference in your savings account, as well. This is another great way to save money for a house without even realizing you’re doing so.

    If you are currently renting and expect your mortgage payment to be higher, subtract your rent payment from what you expect to pay for your mortgage (for example, $1,200 mortgage payment – $900 rent payment). Put that extra $300 a month directly into your savings account as if you were paying your mortgage. This will help you to determine if you can really afford that mortgage payment, and it will quickly increase your savings.

    While it may seem overwhelming to save up a large down payment for a house, just a few minor changes in how you spend and save will make all the difference. When you’re finally unlocking the front door of your new home for the very first time, it will all be worth it.

  • Buying a Vacation Home

    Unique Vacation Destinations

    If you’re looking for something a bit different, a vacation destination off the beaten path may be more your style. Keep in mind that if you are planning to rent your home out to vacationers, you might want to stick to more popular locations. However, if you want a one-of-a-kind getaway destination, here are some fantastic (and often underrated) vacation spots:

    • Kingfield, ME: Kingfield is wooded, peaceful, and close to one of the best skiing destinations in the US, Sugarloaf Resort. Kingfield is also very affordable, with homes starting around $220,000.
    • Corpus Christi, TX: When you think about great beach towns, Corpus Christi probably doesn’t spring to mind. This works in your favor since oceanfront property is very affordable in this cozy Gulf location. In fact, you can find homes for less than $200,000.
    • Oscoda, MI: Located on Lake Huron, Oscoda gives you the best of both worlds: a beachy shoreline and plenty of wintertime snow. This terrific little town has a variety of properties available, with some priced below $100,000.
    • Chattanooga, TN: If mountain hiking, caves, and waterfalls are your thing, Chattanooga is one of the most affordable vacation destinations in the country. You can find a home for less than $300,000.
    • Stroudsburg, PA: An adorable, historic community set in the Poconos, Stroudsburg oozes small-town charm. The Poconos have long been a great vacation destination, and you can get a house in Stroudsburg for about $300,000.
    • Greybull, WY: Are you looking for solitude? A place where you can go horseback riding or hiking and rarely see another person? Wide-open spaces are all yours in Greybull, a tiny town of less than 2,000. Greybull is between Bighorn National Forest and Yellowstone National Park, giving you plenty of mountains and valleys to explore. Best of all, you can find a vacation home in Greybull for right around $200,000.
    • Petersburg, AK: It might take a bit of extra effort to get there, but the island community of Petersburg has stunning mountain views, cozy fishing villages, and wildlife. Located on the Frederick Sound, you can watch humpback whales in the summer, take a boat trip to LeConte Glacier, or just sit and watch the boats cruise through the harbor. You can buy a house here for around $200,000.
    • Ocean Springs, MS: Situated along the eastern shore of Biloxi Bay, Ocean Springs is an artsy little beach town with a long history, first settled in 1699. Spend your days at the beach, or head into town and enjoy the many restaurants, art galleries, and shops. A house in Ocean Springs averages about $200,000.
    • Klamath Falls, OR: Near Crater Lake and not far from Mount Shasta and Lava Beds National Monument, Klamath Falls has something for everyone. From hiking and bird-watching to boating and fishing, Klamath Falls provides a variety of outdoor adventures. Homes in Klamath Falls average about $350,000.
    • Fort Dodge, IA: A terrific location known for tubing along Lizard Creek, Fort Dodge is close to Brushy Creek State Recreational Area, Rosedale Rapids Aquatic Center, and Dolliver State Park. The average home price in Fort Dodge is about $130,000.
    • Alamogordo, NM: If you love beautiful, white sand but aren’t really a fan of the ocean, Alamogordo is located near the White Sands National Monument. This park provides visitors with 275 square miles of white sand dunes made of gypsum, and it’s a spectacular sight. The park is ideal for hiking, camping, and bicycling. Alamogordo is also near the Sacramento Mountains, which offer even more hiking trails. Alamogordo is very affordable, with homes averaging about $150,000.

    What to Consider When Buying a Vacation Home

    Purchasing a vacation property, especially if you plan to rent it out, is much different than buying a primary residence. For example, the lender might require different financing than if you were buying a primary residence. Make sure you do thorough research and find a real estate agent in the area you are considering who can help you navigate all the obstacles you might encounter. Here are some things to consider as you look for vacation homes:

    1. Research the area carefully. If you want to use your home as a short-term rental property or if you plan to leave the home vacant for extended periods, discuss this with your real estate agent. It’s critical they understand the purpose of the home so they can steer you away from properties that won’t suit your needs. For example, if a community has an HOA, short-term rentals might not be allowed. There could also be local restrictions against vacation rentals in certain places. If you buy a home without realizing this, you could be stuck with a property you can’t rent out.
    2. Weigh the pros and cons of hiring a property manager. If your vacation home is some distance from your primary residence, it might be a good idea to hire a property manager. There’s a lot to deal with when you own a short-term rental property, from marketing the property to screening applicants to cleaning and maintaining the home between guests. A property manager can help you deal with all these things. While a property manager can save you time and give you peace of mind, this will cost you. Rates vary, but you can expect to pay anywhere from 10 to 30 percent of the rental income for a property manager.
    3. Location is key. If you plan to rent out your home, you want to be in a desirable location for vacationers. If, for example, you buy in a beach town but your home is miles from the shore, you may have more difficulty renting it out. If your home is in an area with spotty Wi-Fi, that could also impact its rentability. If you want to sell the property in the future, you want to buy in an area where value is increasing. Review area comps with your real estate agent and make sure the home has features that will be attractive to vacationers. For example, if it’s a drive to the beach, perhaps the home has a private swimming pool that visitors can enjoy.
    4. Visit first. Make sure you’re familiar with the area in which you are planning to buy. Take a vacation and spend some time there. Learn more about the area’s attractions, secret destinations, and entertainment venues. This will not only help you determine where to buy, but it will also help you when it comes to marketing your property if you rent it out.
    5. Stick to your budget. Plan your budget before you start looking at properties and don’t be swayed to go above that amount. When planning your budget, make sure you factor in all costs, not just the mortgage payment. For example, if the property is on a lake or river, you might need flood insurance. If it’s along the coast, you might need insurance that covers hurricanes. Set up an account to pay for unexpected expenses, such as items that break, go missing, or need updating.

    Whether you rent in out or not, a vacation home is more than a getaway destination. It’s a place where you’ll create memories with loved ones, relax and recharge, and build relationships in a new community. Start your search for a vacation home today and soon you’ll be enjoying your very own seaside escape, mountain retreat, or wooded hideaway.