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How to Save up for a Second Home

How-to-save-up-for-a-second-home

A second home purchase can be a fantastic investment to make. At the same time, it can also be a daunting undertaking. Before you begin shopping for available homes for sale in Sea Bright NJ that would make an ideal second home, you must first take a step back and look at your personal finances. Unless you’re a whiz at managing your finances, given the enormity of the purchase, you may soon find that saving up for a second home is more than you bargained for.

So how can you set aside money to ensure you not only have enough for a down payment, but also for monthly mortgage, maintenance expenses, and closing costs?

Here’s how to create a savings budget so you can afford that second home.

Evaluate your Finances

If you’re still paying for your first home, the last thing you want is to fall further in debt with your second property.

Here are four questions to ask yourself:

  • Can I pay cash for the down payment?
  • Is my credit score good enough for a low-interest second mortgage?
  • Do I have a retirement fund set aside?
  • Do I have six months’ worth of living expenses in my emergency fund?

If your answer is yes to all these questions, then you might be in a good position to proceed with your plans to buy a second home.

Bear in mind that each person’s situation is different, so don’t hesitate to seek the advice of a real estate professional like Colleen Meyler to confirm your financial readiness.

Manage Your Spending

How often do you make impulse buys? More often than not, such purchases are only good for a fleeting feeling of satisfaction, leaving you with buyer’s remorse and depleting your account. To limit impulse buying, set aside money for fun spending and stick to it. It can also help to let a day pass by before making your purchase to let your emotion and excitement simmer down. Most important of all, shop with a plan, so you’ll always know what you want to buy before adding stuff to your cart.

Keep Your Eye on the Prize

When you consult with a real estate professional, you’ll have a good idea of how much house you can afford given your income and your obligations on your first home. Outside advice will help you create a more objective savings plan to meet your financial goal. Once you know how much you can set aside each month, you’ll know how long it will take to save enough for a down payment.

To convince lenders you have the means to afford a second home, look for ways to boost your income. Ask for a raise or a promotion, if you think your company is in the position to make it happen. You can also accept side gigs and scour freelancing job sites for opportunities to earn extra cash.

With the help of a knowledgeable real estate agent like Colleen Meyler, you’ll not only learn if buying a second home is right for you, you’ll also be guided on how to make the most of your investment. Talk to her before you shop for second homes for sale in Sea Bright NJ and surrounding shore areas.  Contact her at 732.995.5102 or ColleenMeyler(at)gmail(dotted)com

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