Last week, we discussed how higher interest rates are increasing the cost of owning a house. On hearing this news, many fear they’ll never save enough. Still, saving up to own an asset like a home can bring you great returns and help you avoid being at the mercy of the rental market. Finding a new home and saving for a down payment is more challenging with higher interest rates, but it’s still possible. You just need to understand the expenses to plan for. The professionals at Foundation Mortgage tell you what you need to save for if you’re interested in buying a home in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee.

1)     Saving for a Down Payment on Your Home

Many people say you’ll need to save at least 20% for your down payment on a new home. This is not always the case; it depends on many factors. These can include the market you’re buying in, the interest rates plus monthly loan payment you can afford, and the offers your competition are making. Look up average home prices in your area, calculate your mortgage payments, and set your targets on the right amount of down payment to save. Starting with a reasonable goal is the first key to success, you can always increase the goal amount as you go.

2)     Saving for the expenses of owning a home

While the mortgage and interest rates are big factor to consider when saving for the costs of owning a house, there are other things to review. Maintenance, insurance, repairs, and utilities are some major costs to factor. When you inspect and make an offer on the house, you will be allowed to ask the owner to make certain repairs and make your purchase contingent on these. However, this process is not always perfect. Certain repairs will not be approved, be missed, or become an issue after you already own the home. You will want to plan for these expenses.

3)     Saving for the cost of finding a home

When you go out to look for your home, you will need to save up before owning it, as well. Many people need to save for a deposit, also known as earnest money. This shows the seller that you are willing to put some money into a deposit to hold as they consider your offer. While this money usually gets refunded to you or put towards the cost, you still need to plan for it.

The professionals at Foundation Mortgage are here to help you plan and look for homes in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee. Contact one of our helpful team members for a consultation today!