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Tips to save for a home

Now that the holidays are over, why not set a BHAG (Big, Hairy, Audacious Goal) for yourself in 2023! Let's look at some tips from bankrate.com on saving for your first home.

Our friends at bankrate.com recently posted an article with some housing predictions (you can read the entire article here). This article included some exciting tips on saving for your first home. Let's take a look at those.

1. Think about earning power

When you love what you do, money doesn't tend to matter - except when you are looking to purchase a home. Bankrate has tips on asking your employer for a raise that you might want to look at or look for new opportunities elsewhere. Sixty percent of workers who switched jobs over the past year earned more money in their new roles (including considering inflation) (see the Pew Research Center study). Once you earn more money, you can redirect that extra cash into your Xiggit Savings account and start building that down payment fund.

2. Decrease your debt

Lowering your debt-to-income (DTI) ratio is the best way to qualify for a mortgage down the line. Start paying down those credit cards, student loans, and car payments. Our friends at Greenpath will give you a complimentary Financial Planning Session through the Xiggit app. Once you have your plan in place, use your Xiggit Savings account to make that plan a reality!

Business man pointing to transparent board with text Get Out of Debt

3. Keep hidden homebuying costs in mind

Don't forget to include the other less apparent expenses when figuring out the purchase price of your home. You'll also want to ensure you're prepared to pay closing costs (if the seller is not paying those) - lender fees, property tax, appraisal expenses, and other administrative costs. In 2021, the average closing costs were $6,905, according to ClosingCorp. Remember, you'll want to stay in your newly purchased house for at least five years to make it a worthwhile transaction.

4. Focus on local, not national, markets.

Most of what you read (including this article) includes broad generalizations about "the housing market." Housing markets are hyper-localized, which means they vary from region to region. As you keep your housing budget in mind, focus on the conditions in the cities you're looking at. And don't be afraid to expand your search - you might be able to find some more affordable markets slightly outside of your initial target area.

What's next?

With your budget and plan ready, it's time to start preparing and saving for that down payment. Download the Xiggit app to get started. Take advantage of our complimentary financial planning from our partners at Greenpath. Once your plan is in place, you can set up as little as 1% of your paycheck (or $5/week) to go to your Xiggit Savings Account and start to make your plan a reality!

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