Is one of your New Year’s Resolutions to buy a new home in 2014? If so, before you start looking at Palm Desert real estate, you should probably plan your budget and start saving up for a down payment.
Whether you’re looking at homes for sale in La Quinta, condominiums in San Diego or a beach cottage in Santa Barbara, your first step is to start saving. First-time buyers are notoriously anxious about the down payment they need to raise for their initial real estate investment. While lenders typically have different rates and provide varying information, a traditional mortgage typically requires around 20 percent of the purchase price. Keep in mind that the greater the down payment, the better your interest rates will be.
Before you start looking for homes for sale in La Quinta, your first step should be assessing the resources at your fingertips and finding ways to increase them. Since you’ll already be taking out a mortgage, you probably don’t want to take another loan out to fund the down payment. This may be a time when you cash out those certificates of deposits you’ve been hanging onto or sell your mutual funds. Another option that many take advantage of is borrowing against 401k investment funds. Start meeting with your finance manager now to determine which options are best for you and your family.
If you are going to spend a substantial period of time saving up, be certain that you’re getting the most bang for your buck. Deposit your funds are in a high yield account—look for the highest APY possible that matches the amount of flexibility you can live with.
Whatever you do, make sure to educate yourself on the best ways to invest your money and how to best make this significant and sometimes overwhelming purchase.
image: beginnersinvest.about.com