(InvestigateTV) — Budgeting for a new home goes beyond a monthly mortgage payment, as the average homeowner spends $17,459 each year on non-mortgage costs such as utilities, insurance, and property taxes, according to Money.
Michael Joyce with the financial firm Agili said if the goal is buying this spring or next, start budgeting now and start saving as much money as you can.
“Typically, you have to put 20% or you have to pay PMI,” Joyce explained. “Now there are some ways around that, and PMI stands for Primary Mortgage Insurance. But the best thing to do is to save up. Save in something that is relatively safe. The good news is those things that are relatively safe earn a pretty good return right now.”
Joyce said people could use very short-term treasury bills to save, which could get around 5% depending on the market. They can also see some high-yield money market accounts in the 5% range.
He encouraged potential buyers to work on improving their credit if that needs improving.
“The mortgage companies, the banks that will write the mortgages, they are really looking to have higher quality borrowers,” Joyce noted.
He advised buyers to talk to friends who have recently bought a home to see if they ran into any surprises or have any advice.
He also suggested that people get a trusted realtor as well. Word of mouth is good, but also sit down and interview them for the job.
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