When you are looking to purchase a home in the Bay area, it is important to work with the right San Francisco Relocation / Property Management firm to find the right place that meets your needs. After that, there are a considerable number of factors that you should take into account so that you can make the most of your opportunities.
Purchasing a home, particularly in the Bay area requires the right planning which is especially true for first time home buyers and folks relocating to the area. What follows are sound tips to purchasing the right property for your needs in San Francisco.
Make a Large Down Payment
A basic rule of thumb is that the more you save, the better position you will be in obtaining the loan and the better you will look on paper to the sellers. You’ll want to put down as much money as you can, but the general rule is that 20% works well for first-time home buyers. This is because 20% shows just how much of a stake in the property they are willing to pay.
While FHA loans or those insured by the Federal Housing Administration offer a greatly reduced down payment, sometimes as low as only 3.5% of the purchase price, they require buyers to actually pay for private mortgage insurance which can be as high as 1.5% of the loan each year. Having a much larger down payment more than offsets the overall cost that would be incurred by adding private mortgage insurance rates.
How to Save for that Down Payment
Admittedly, saving up 20% for a home that could cost hundreds of thousands of dollars is not going to be easy. However, the effort will certainly be worth it considering just how much you can save on your mortgage with such a large down payment in effect.
Here are some effective methods to help you save money so that you can earn that down payment faster. Remember to draw up a plan of action first so that you can calculate how much you can save and the time period in which you will accomplish your goal so that you focus your efforts.
Eat More at Home
Live Off One Income, Use the Other to Save for the Home
Sell your Vehicle
Live with Your Parents
Divert Money into Savings Account
Create a New Income Stream
Invest in a Business
Each of these methods can really save you money and you can target that to your down payment. Selling your vehicle may very well earn you thousands of dollars instantly which can significantly cut down on the time needed to create the down payment you need. However, the most effective may be to create a new income stream that will grow over time and not only get you the down payment, but also pay for the mortgage as well.
Be sure to consult with the right San Francisco Property Management / Relocation Company so you get the best home for your needs. Plus, you can receive sound advice to save up for your down payment and other helpful hints as well.