Honestly, unless you are independently wealthy, you need to save as much money as you can if you want to buy a house. There are many reasons for wanting as much money saved as possible.

• If you make a bigger down payment your mortgage payments will be lower.
• Depending on the type of financing your will have, you have to have a certain down payment amount to get the mortgage in the first place.
• Many homes are in multiple offers these days and having a larger down payment may help your offer get the home.
• Once you own a home you will have other expenses for upkeep, repairs, and things you may just want for the house.

You don’t think you can save any money.

• Fact is, most people can find a way to save if they want to. If your income is really too low to save, then you may want to wait to buy a house.
• Cut out some of your extra activities like eating out or shopping.
• Skip your vacation this year and bank the money you would have spent.
• Put off buying a new car unless you really have no choice.
• Spend more time with your friends that tend to be more frugal rather than your big spender friends.
• Create a budget with a savings plan and stick to it, no exceptions!
• At first it may seem like a sacrifice, but if you really want your own home, cutting back for a time will pay off big in the end!

On April 1 this year the FHA mortgage insurance rate (MI) will increase on FHA loans.  If you are planning on getting an FHA loan with less than 20% down, this will affect your loan.  This is just general information, so please check with your loan officer to see how these changes will effect your financing when you purchase your home.

Right now FHA loans have 2 levels of MI:

• Up front MI which is 1% of the loan amount which can be added to closing costs or you can finance it by adding it to your loan amount
• Annual MI which is 1.1% of the loan amount if your down payment is 5% or more or 1.15% of the loan amount if your down payment is less than 5%. These annual fees are paid monthly

Effective April first the MI will change to:

• Up front MI will be 1.75% of the loan amount
• Annual MI will be 1.2% of the loan amount if your down payment is 5% or more or 1.25% of the loan amount if your payment is less than 5%

If you are shopping or a home and are using FHA financing, you need to be under contract by April 1, 2013 to get the current MI rates.  Please consult with your mortgage loan officer for more information.

Wells Fargo is sponsoring the Neighborhood Lift Program event on September 7th & 8th.  Neighborhood Lift is a temporary program that can provide qualified buyers with up to $15,000 in down payment assistance when purchasing their own primary residence.  For many buyers, coming up with the down payment is the biggest obstacle toward purchasing a home.   The residence must be in the cities of Minneapolis or St. Paul to qualify.  Although Wells Fargo is sponsoring this program, buyers can work with other lenders for the mortgage on their home.  For more information on this program and how to sign up, click here.