Save Today For Big Payoffs In The Future

A Guest Post by Robert Sommers:

Robert Sommers is a freelance mortgage and real estate writer based out Baltimore. He has worked for over 25 years as a licensed real estate agent in all areas of commercial and residential real estate.

A down payment is a huge financial commitment and very often one of the biggest obstacles in buying a home. Not to mention the fact that due to the recent mortgage meltdown, many lenders are now requiring higher down payments on a mortgage loan, making saving up even more of a challenge. If you want to avoid paying private mortgage insurance, you’ll need to make a down payment of at least 20%. For those unfamiliar, PMI stands for Private Mortgage Insurance which is an extra cost required lenders that is built into your monthly payments for a home mortgage loan greater than 80% of the home’s value.

One of the best ways to save for a down payment is through setting up a savings plan. The first step in doing this is assessing your current financial position. This means taking a look at all of your assets and creating a budget based upon how much you need to save monthly for your down payment. Carefully add up all financial instruments you currently possess- CDs, stocks, bonds, T-Bills, etc. In addition to any mutual funds and even savings/retirement funds- 401K’s, IRA’s, Roth IRA’s, etc., as the proceeds from borrowing against a retirement fund can be used towards making your down payment.

Once you calculate all of your assets, you can get an idea of how much money you’ll need to save by subtracting the total from the amount needed for your down payment. The outcome will aid you in formulating a budget that will help you determine exactly how much you need to save each month towards your down payment.

Once you know how much you need to save every month, you might want to consider holding the funds in a high-yield savings or MMDA- money market account. These offer a great deal of security and liquidity and the interest rates the offer are also very attractive. This will allow you to earn interest on the money you save, thus helping you to reach your down payment goal faster while still giving you easy access to your money.

While the task of saving up for a large down payment may seem daunting, it is definitely doable if you create a budgeting plan and stick with it. While some financial sacrifices may be needed in order to reach your down payment goal, it will all pay off when you purchase your dream home.

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Note from Carrie: I think it’s great how Robert emphasizes saving, saving, and more saving for your first house.  I’ve stressed before how important it is to wait to buy a house until you’re ready – which includes waiting until you have that 20% saved.  So many of my friends have bought houses before they are truly ready and are now paying the consequences in terms of being strapped for cash and maxed out credit cards for expenses like maintenance and decor.  The message is clear – save, save, save!  Happy saving!

Let’s Take A Closer Look At The Male HDTV Obsession

Ladies, we’ve all seen it.  You stop by Best Buy with your guy to pick up the latest version of Quicken and before you know it, you look over and find him in a trance.  His eyes are glazed over and he’s gazing at something across the store.  There’s a faint hint of a smile on his face and just the tiniest bit of drool making its way down his bottom lip.

“Lloyd!  Hello?  Anybody in there?” I say loudly.  Nothing.

He doesn’t hear me.  As if pulled by some magnetic force he seems to glide effortlessly to another section of the store.

That’s when I see it.

He’s fixated upon the bevy of LCDs and plasmas plastered up on the back wall.  They seem to be shouting colorful, crisp, sweet-nothings to Lloyd.  Do they speak in some sort of secret dialogue to males that females can’t understand?

Truth be told, he may be close to perfect, but Lloyd does really have an innate infatuation with HDTV flat screens – or any flat screen for that matter (we have two very large old-school tube TVs in our apartment).  Every time he lays his eyes on those flat screens, he becomes more delirious than every girl in the world was the day that the Sex & The City movie premiered.

I, on the other hand, watched TV on this 13-inch gem for a good 20 years and was more than confused when my parents bought me a new (tube) TV for Christmas a couple years ago:

You served me well, RCA.

In my female mind, it displays any show you could ever dream of watching just as well as those fancy 40 inch LCD screens up on the wall at Best Buy.

If it were up to me, we’d watch TV on our perfectly functional tube TVs until they day they stopped powering on.  To me, they work just fine.  To a guy though, this tube TV we have in our apartment is pure blasphemy.

Further proof of the male HDTV obsession?  Just check out the comment that Lloyd left on my post back in June titled “Do you have HGTV Envy?“.

The good news is that Lloyd has an abnormal amount of self-control (he must if we don’t already have a 50-incher on our living room wall) and we’ve made a little bit of a compromise as far as his dream television goes.  We’ve decided that what’s much more important now is to save for a house in the future and once we’ve bought said house, we each get to splurge on a big item for all of our hard work and dedication to saving.

What will our splurges be you ask?  If you haven’t guessed his, it will be a HDTV flat screen (the exact size has yet to be determined).  For me, it will be the biggest, firmest, most extravagant KING BED I can find.

What would your splurges be?

Taking A Walk Down Dream Lane…

Lately, Lloyd and I have been spending our evenings taking walks and drives through our dream neighborhoods in Kansas City.

We’re still a good 2 years off from buying a house (we still have to get engaged, married, and all that jazz before we can buy a house) but one of our favorite pastimes is daydreaming about our perfect house.

We have the vicinity pretty much narrowed down, but here are some other things that we want in our perfect house:

• Basement: We want a basement for a couple reasons.  First, houses with basements have better resale values in the Midwest than those without basements (hi there, welcome to Tornado Alley).  Second, we want to make a home gym in our house.  We are both very passionate about fitness and would probably go crazy if we couldn’t work out.  We’ve both always really wanted our own home gym and plan to go for it when we buy our own place.
• Pool: In the neighborhood, not the backyard.  I love the pool, I love the sun, I love the summer.  I wanna pool!
• Updated Kitchen: No more crappy apartment kitchens! Like this…

[Source]

• Spanish Tile: Oh Spanish Tile, how you taunt me.  I love, love, loooove the look of Spanish Tile.  So mysterious, drug dealer-ish, and southwestern-looking.  Not that I want people to think I’m a drug dealer or anything…I just love the whole look that is exudes.  However, that shiz is expensive.   It might have to wait until our second or third house.  But just for grins, here is a fantasy picture of a house that I love:
  

• 2 (maybe 3) Car Garage: I despise walking out into the snow during the winter.  Actually, I despise the winter all together.
• Close to the Interstate: I have road rage.  It’s worse on the city streets.
• Trees!: Which means, a little older neighborhood.  Also, must have two trees sort of close together so I can put up a hammock.  I’ve dreamt of a hammock all my life and I want one when I finally have a house!
• Concrete Patio: So I don’t burn the place down!  Which brings me to my next requirement…
• Big Backyard: We’re both big time dog lovers and can’t wait until we can get a little pooch to run around our backyard.
• Fattie Whirlpool Bathtub: I haven’t taken a luxurious bubble bath in years.  Apartment tubs kinda gross me out.  I’m hoping my new home’s tub is super clean and luxurious so I can take some darn baths!  (Editor’s Note:  I DO take showers.)
• Attic Fan: Is this just a Midwest thing?  If you don’t know what an attic fan is, you are missing out!   Check out the details here.  I love attic fans and they seriously cool the heck out of your house without having the air conditioning on.  Unfortunately, I think they are becoming extinct.  Sad face.

Too much to ask?  I hope not.  You may have noticed that I don’t really have a preference on size.  I’d prefer a smaller house even – cheaper utilities and less space to clean. 😉

Now…on to that whole saving $40,000 thing…