How to Start Saving Money for a House

Thursday, November 17, 2022

When you spend your leisure time flipping through Zillow® and scrolling around decor inspo on Instagram, it can seem like actually saving up enough money to buy a house is more of a fantasy than the celebrity vacation vibes popping up in your feed. House prices are high here, and gathering up a down payment can look intimidating.

But putting in the effort is more than just a nice idea. Owning a house in Hawaiʻi is so meaningful for us kamaʻāina - a foundation for long-term financial stability, a place for our family to feel safe and secure, a path for our future generations to hold on to a piece of our island home in an uncertain world. So how do you get started?

Couple on computer

Set your goal

A few questions to think through, or talk over with your family, should start with:

  • What kind of house do I want to buy, and how much do those homes usually cost?
  • When do I want to buy it?

Knowing where the end zone is - and being able to see it clearly - makes it much more likely that you’ll be equipped with a realistic, achievable plan to get there.

Make it bite-sized

Use a savings calculator like this one to figure out what you’ll need ready to go, for your down payment and closing costs. You can calculate the total amount, plus what the monthly savings schedule needs to look like to get you there.

If the kind of house I want usually costs around $800,000, I want to give myself five years to get ready, and I want to have a 15% down payment on hand, the calculator will tell me to expect a total of $168,500 in up front costs (down payment plus other expected things like closing costs and home maintenance costs). To get there over five years, the calculator says I’d better save $808.33 per month, or $186.54 per week.

Get the tools for success

A few questions to think through, or talk over with your family, should start with:

  • Set up a designated savings account and connect automatic transfers from your checking account each month. Out of sight, out of mind, into your homeownership goals!
  • Look around for current budget items you can trim, and point those dollars toward the House Fund instead. Dreaming about lunch on your new lanai makes home-made mac salad taste much better than a $20 plate lunch any day. Budget calculators can help you get a fresh perspective and are free, really useful tools.
  • Keep an eye out for opportunities to make a bigger dent. Bonus at work? House fund! What to get for my birthday? House fund! Side hustle doing well? House fund!

Find your blind spots

One really effective way to find all the blind spots in your financial picture is to go through the process of getting pre-qualified for a mortgage with a trustworthy home loan officer. As part of the pre-qualification exercise, they’ll run your credit score, talk with you about your particular situation, and walk you through what else you might need to think about as you’re preparing to buy your home. Often it’s worthwhile to get guidance on your credit-to-debt ratio (finding the right mix!) or how to improve your credit score, to make sure you can get the best possible deal on your mortgage rate when it’s finally time to buy.

There are lots of really great free tools online to help you get smart about budgeting, finance and setting yourself up for success, starting right here with the ASB Financial Education resources; these are perfect for curious clicking with a bowl of popcorn on the couch. But for really getting into the details, nothing beats a person-to-person meeting with an advisor right down the road, which is why ASB’s mortgage experts and neighborhood bankers are ready to talk story.

Mark James, vice president and executive residential loan officer, has worked with countless families to help them chart a path to their home ownership goals.

“Every person has a unique story, which is why building a relationship with a trusted expert is so important; from our seats here at the bank, we can talk through all the different tools and levers available to you, and customize a game plan that is right for your life, for your family’s plans.”

Buying your home might be closer within reach than you think. Set your goal, make your saving plan bite-sized, use good tools to help you along the way, and get smart about your big picture financial health - and you’ll be in your new home before you know it. We’re here to help.

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