2026: A Promising Year for Homebuyers
As mortgage rates dip to their lowest in over a year, 2026 could be the perfect time for those waiting on the sidelines to finally purchase a new home.
Financial Planning: The Key to Homeownership
Whether you’re a first-time buyer or looking to upgrade, securing a new home this year requires strategic financial planning.
While forecasts are hopeful, without proper financial preparation, you might miss out on your dream home when it becomes available.
Steps to Financial Readiness
Experts suggest taking proactive steps now to ensure you’re ready when the opportunity arises. Start the year with a comprehensive financial review before diving into property listings.
“In today’s competitive market, a prepared buyer isn’t just eager to own a home; they’ve done the necessary financial groundwork,” says Realtor.com® senior economic research analyst Hannah Jones. “This involves having savings for a down payment, understanding monthly affordability, and aligning expectations with market conditions.”
Essential Financial Questions
Consider these crucial questions to assess your financial readiness:
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What is my current savings balance?
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How much is allocated for a down payment versus emergency funds?
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Am I maintaining my retirement contributions while planning to buy?
Building a Robust Savings Plan
Remember, your savings should cover not only the down payment but also emergency funds, maintenance costs, and a few months of mortgage payments.
“Ideally, you should have enough saved for a down payment and 2 to 3 months of mortgage expenses,” advises Katrina Martin, a tax expert with Wow Tax and Advisory Service in Michigan.
Understanding Loan Options
Your savings goal for a down payment will vary based on the type of loan you pursue. Government-backed loans like FHA, VA, and USDA offer more flexibility, with some requiring no down payment.
For conventional loans, expect to save between 3% and 20% of the home’s price. Even with low or zero down payment options, Martin notes the importance of setting aside escrow funds for taxes and insurance.
Beyond the Down Payment
It’s crucial to save not just for the down payment but also for other financial obligations. Despite lower mortgage rates, insurance and property tax fluctuations remain significant factors nationwide.
