6 Tips for Saving Up to Buy a Home in Fairbanks
Do increasing rental prices finally have you thinking about buying a home in Fairbanks? Or, maybe it’s the historically low interest rates, the desire to build equity, or the push to start a family? Whatever your reason for deciding to venture into the Alaskan real estate market, you’re making the right choice. To make your transition into homeownership a little bit smoother, we at Madden Real Estate will stand by your side every step of the way. However, before you start searching for your dream home, an essential key to your success in the Alaskan real estate market will be saving up enough money for a down payment – and then some.
As of last week, the average listing price for a home in Fairbanks was $229,421. The average down payment for a home is 20%, bringing your upfront costs to about $45,884. That’s a hefty chunk of change for most homeowners, let alone a first-time homebuyer! If that number seems out of reach, there are a number of ways you can expedite the saving process. Here are a few tips for saving up to buy a home in Fairbanks.
Create a dedicated savings account for your down payment. Set up an automatic electronic transfer from your personal savings or checking account each month so you can start saving money without even thinking about it.
Cut your cable. Americans pay an average of $160 per month on popular phone, Internet, and cable TV bundles. Rely on your cell phone instead of a landline, and sign up for Netflix or Hulu Plus so you can still catch your favorite shows.
Liquidate miscellaneous assets. Sell your car, motorcycle or boat. Apply your income tax refund to your down payment, and sell any valuable collectibles you’ve been holding onto.
Call on a generous family member. Some mortgages allow you to apply monetary gifts from immediate family members towards your down payment. Be prepared to show a “gift letter” and copies of checks or wire transfers.
Eliminate or reduce closing costs. This is where the negotiation skills of your Fairbanks real estate agent will come in handy. While this doesn’t directly apply to your down payment savings plan, you can save several thousand dollars if you can get the seller to foot the bill at the closing table.
Tap into your retirement fund. If you’re a first-time homebuyer, you can withdraw up to $10,000 from an IRA to use towards a down payment on a home purchase without receiving a penalty.
Whether you have saved $100 or $10,000, reaching your ultimate goal of buying a home in Fairbanks will be well worth the minor inconveniences that lie ahead. Furthermore, it’s important to keep in mind that a down payment won’t be the only expense associated with your home purchase. Setting some cash aside to dip into for major repairs, and saving enough money to comfortably pay your monthly mortgage and utility bills are also important pieces of being a responsible homeowner. If you’d like any additional tips as to how you can save up enough money to buy a home in Fairbanks, please let us know. The professionals at Madden Real Estate would be more than happy to answer any questions you have about the home buying process!
Wes Madden, CEO/Broker
Madden Real Estate
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