Saving for a house can be very intimidating for most future homeowners. The average price of a home in Massachusetts purchased by first-time home buyers is $595,200. Likely, that’s more money than you’ve ever spent in your life on anything. So where can a first-time home buyer begin? Rockland Federal Credit Union has prepared these tips for learning how much you can afford and how to save for your home in one year. With some smart planning, help from experts and close monitoring of your spending habits, the first home of your dreams may not be as out of reach as you think.

Learn How Much House You Can Afford

To begin your home buying journey, you need to learn your range of affordability. There’s nothing worse than searching for your dream home and realizing too late that you ended up looking at homes you can’t actually afford. One important point to keep in mind is that just because a mortgage lender says that you can take out a mortgage for a certain amount, doesn’t always mean that you should. To avoid this common mistake, Rockland Federal Credit Union offers various tools to ensure you know how much house you can afford ahead of time.

For a quick way to plug in numbers, run current credit union home loan rates, against a home loan affordability calculator. To ensure you meet your financial goals, you will first need to establish a down payment budget. Keep in mind your timeline for this budget. If you want to save for your first house in 12 months, you must represent that in your spreadsheet. It’s also important to consider the length of the mortgage loan you feel comfortable paying off. Consider the 12/25 rule of thumb: a 15-year fixed-rate mortgage should make up no more than 25% of your monthly income.

Seek Help from A Massachusetts Financial Advisor

For assistance with sticking to your budget and ensuring your budget is set up to realistically save the amount of money needed within your timeline, contact a local Massachusetts financial advisor. They can provide you with helpful tips on how to improve your chances of being able to save for your first home. He or she can introduce areas where you can trim your spending and point out the amount you should aim to spend on specific categories (e.g.: clothes and food) so you can reach your goal within your target timeframe.

• If this will be your first home mortgage, financial advisors may be all the more useful to you. Consider your advisor as a first-time home buyer guide for all of your questions along the way. Some financial institutions, like Rockland Federal Credit Union offer special first-time home buyer programs, which offer discounted home loan rates, personalized one-on-one mortgage application assistance, and a reduced down payment.

Pick The Ideal Mortgage Lender For You

The benefit of having a mortgage loan through a credit union is they often offer members favorable interest rates on home loans, in comparison to banks or other lenders. Choosing the right mortgage lender to stick with you throughout this exciting process is a crucial step in the home buying journey since they can expertly guide you towards the most reasonable rates, things to watch out for as well as during the home loan pre-approval.

If you’re in a time crunch, you are going to want to get a majority of the busy work out of the way early on. If you want to appear more serious to those selling their homes, you should first secure a mortgage pre-approval. This also benefits your lenders because they will now have all the information needed for when you decide to apply for a home loan. In addition to ensuring your credit score is mortgage-worthy, a lender will ask you for information including but not limited to your social security number, employment details, bank account numbers, tax returns from the past two years, and your intended down payment.

Utilize A High-Interest Savings Account

All the money you’re saving towards your new house needs a safe place to grow. While most people have a savings account, trying to save for your home down payment within a year requires a higher interest rate option. Rockland Federal Credit Union offers a high yield savings account to help your money grow. Typically, a traditional savings account will offer a very low interest rate (less than 1%), while a high-yield savings account or certificate can provide a significantly higher rate. For a better idea of how much money can grow in your savings account, use a compound interest calculator.

Buying a house in Massachusetts can truly be within reach for many if you plan for and are dedicated to saving and being financially responsible. At Rockland Federal Credit Union we are here to help you navigate all of life’s milestones, including buying your first home. Contact us to see how we can help you along your homebuying journey.