5 Steps to Saving for a Down Payment

Step 1: Set a clear savings goal.

The first step in saving for a house is to know the exact dollar amount you actually need. In a perfect world, you’d pay for your house with 100% cash. But that’s not realistic for everyone.

So, if you’re getting a mortgage, start by asking yourself these questions:

• How much should I spend on a house? The answer depends entirely on your lifestyle, your income, how you spend money, how you budget and how much house you’re looking for. But whatever you do, never spend more than 25% of your monthly take-home pay on a 15-year fixed-rate mortgage—otherwise, you’ll be house poor. And stay away from expensive FHA, VA and USDA loans that rip you off.
• How much down payment should I have? When deciding how much down payment to save, your ideal goal is at least 20% of the home price. Anything less and you’ll have to pay for private mortgage insurance (PMI). If you’re a first-time home buyer, a smaller down payment of 5–10% is okay too. But then you will have to pay PMI.
• How long will it take me to save for that down payment? This is up to you, but patience and hard work really do pay off! You should set a goal to save a nice down payment in two years. Try not to drag it out much longer than that, though. You’ve got plenty of other money goals to take on next—like your retirement and the kids’ college funds (if you have kiddos).
• Where can I put money for a down payment? Just like an emergency fund, you’ll want to put your down payment in a place that’s easy to access—but not too easy. Remember: A down payment is not an investment. So, stashing that cash in a money market savings account will get the job done. You won’t make tons on interest, but you won’t lose money either.

Again, let’s say you want to save $40,000 in 24 months to cover your down payment (plus closing costs and other moving expenses). Now that you’ve set your goal, it’s time to fast-track your savings.

Step 2: Tighten your spending (temporarily).

Let’s start with the money you’re already bringing in every month. That’s right—let’s flex your budgeting muscles! You’ll be amazed at how much money you find when you pay attention to your spending. Here are some ideas to help you tighten your spending temporarily while you work on saving for a house:

• Take a break from the gym: $60 per month
• Save going out to eat for special occasions: $200 per month
• Trim your clothing budget: $100 per month
• Buy generic: $160 per month
• Cut the cable: $110 per month

These tips could save you $630 every month! That adds up to more than $15,000 over the course of 24 months. Now, get creative and think up even more ways to trim your spending.

Step 3: Hold off on your retirement savings (temporarily).

If you’re already saving for retirement, this might feel really weird. After all, at Ramsey, we teach you to start investing 15% of your household income for retirement after you’re out of debt and have your full emergency fund in place.

But if you’re planning to buy a house in the near future, it’s okay to hold off on your retirement savings and put that money toward your down payment. Remember: You’re in charge of how gazelle intense you want to be. If that’s what you decide to do, that’s okay! It’s only temporary. Once you’re sipping coffee in your new breakfast nook, you can get right back to putting 15% toward your retirement goal. Just make sure this is only a quick detour (like a year or two)—not a five-year pause. Think of it like this: If you’re currently investing $500 a month into 401(k)s and IRAs but you put that money toward your down payment savings instead, you could save around $12,000 in two years. That’s a big boost for your down payment!

Pro tip: Don’t borrow from or cash out your retirement accounts to speed up your down payment savings. Not only will you get hit with taxes and early withdrawal penalties, but you’ll also tank the long-term growth of your retirement savings—costing you hundreds of thousands of dollars at retirement. Yikes.

Step 4: Boost your income.

If you’re looking for another way to turbocharge your income, there’s nothing like picking up a side gig or a second job. Your side hustle doesn’t have to be torture either. When you’re thinking up ideas, start with the stuff you love doing already. Check out these ideas:

• Like driving? If you don’t mind carting strangers around or making deliveries, you could make some sweet cash on a flexible schedule through companies like Lyft or Uber.
• Enjoy teaching? Search online for tutoring jobs or ways to teach English as a second language. If you have advanced degrees, you could earn even more.
• Love pets? Let your friends and coworkers know you’re available to watch Rover the next time they’re out of town. Get some fur therapy and make money at the same time.
• Now, you’re probably wondering: Is it worth it? (That’s like asking us if Dave Ramsey hates credit cards.) Yes—it’s absolutely worth it!

Let’s say you start a side hustle and put in 10 hours a week making $15 an hour. That’s an extra $120 per week—after taxes! Keep that up and you’ll have more than $12,480 for your down payment savings in just 24 months.

Step 5: Cut the extras and save even more.

It’s time to get tough and cut out some extra spending. Ouch. It might hurt, but keep your mind on your why—home sweet home. Here are a few ideas to get you started:

• Skip the summer vacay. This one is going to hurt, but in the long run, it’ll be worth it. Skip the fancy summer vacation, and throw that money in savings instead. You could probably pocket $2,000 from that alone.
• Sell some stuff. Do you have a lot of extra stuff collecting dust around your house? Sell. It. All. Take advantage of online sites like thredUP or Poshmark for gently used clothes, then use Facebook Marketplace or eBay for everything else.
• Have a garage sale. Is your neighborhood having a sale soon? A garage sale can bring in some extra dough like nobody’s business. Scoring $500 from a Saturday morning garage sale is a win in our book.
• Save all the money you earn from your annual raise or bonus. Planning to get a little Christmas bonus? What about a bonus for a job well done? No matter what that extra cash is for, you can tell the big-screen TV to wait. Stash your bonus money in savings instead. That could be an easy $1,500 bump.

Source

Should I Buy or Build a House?

Getting brand-new things is super fun, right? Well, it can get even better when you buy something custom-made. You can tell a designer or builder exactly what you want, and voila! They’ll make it just for you. The problem is, custom-made things tend to cost more and take longer to make than anything store-bought or mass-produced—especially when it comes to houses. Time and money are two important things to consider when you’re deciding whether you should buy or build a house. To help you make the best choice, let’s break down the pros and cons of building a house, plus the costs.

Pros and Cons of Building a House;

Pros

• Customization: Building a house from the ground up lets you personalize it to suit your lifestyle and tastes—everything from the layout, cabinets and flooring to the sinks, lighting and doorknobs! Even cookie-cutter homes built within subdivisions allow for some customization in colors, flooring and certain finishes. So, whether you’re after a rustic feel or a fancy art deco vibe, you can make these style choices early on.
• Low to no competition: When you own land to build your home on, you obviously have zero competition with other buyers.
• Little maintenance: Since new homes must meet current building codes and have up-to-date technology, you probably won’t have to worry about big repairs or maintenance issues for the first few years—no leaky roofs or failing HVAC systems for you.
• Low energy costs: New homes often feature the latest energy-efficient systems and materials, which usually lead to lower energy bills.
• Newness: You get to start fresh as the first owner of your home and enjoy brand-spanking-new everything. I love that new house smell—don’t you?

Cons

• Price: We already know one disadvantage of building a house is that it costs more than buying an existing home. That’s not so bad if you’re able to budget for it, but that extra expense can be a real hang-up for some people.
• The wait: It can take close to a year to build a new house between planning, approvals and the actual construction. On the other hand, closing on an existing house usually only takes 30–60 days.5 Plus, if you’re building, you’ll have to pay to live somewhere until your new home is ready. That means you could get stuck paying your current rent or mortgage plus the construction costs for several months. Ouch.
• No negotiations: Most buyers go into an existing home purchase hoping to negotiate a lower price. While that’s super common in the resale market, there isn’t much leeway on closing costs or purchase price with a newly built home unless your real estate agent gets creative at the negotiating table. But even then, you’ll probably get more bang for your buck with an existing home.
• Noise and mess: If you build a house where other new homes are being built, you might have to deal with construction noise, traffic and globs of mud along your commute. Worse, you could end up with a roofing nail or a screw in your tire. Sure, the neighborhood will eventually calm down as other homes get completed, but it’s something to think about if loud noises and neighborhood construction get on your nerves.  
• Stress: When you build a house, you’ll have to purchase land, decide on a home design, and pick out flooring, fixtures, cabinets, countertops, interior trim, exterior trim and on and on—all while staying within your budget. Managing all the details and nickel-and-dime expenses of building a house takes time and effort. Don’t underestimate the stamina and patience you’ll need to make sure it’s all done the right way.
• Hidden costs: Those dollar signs you see on things like countertops, fixtures and appliances are just the tip of the iceberg. Upgrades and unforeseen problems can quickly drive up the price of your new home, and those costs may or may not be rolled into your contract price. Play it safe by budgeting to pay cash for those unexpected expenses. And don’t forget about post-move costs like landscaping and blinds—they’ll sneak up on you too.

Pros and Cons of Buying an Existing House;

Pros

• Price: An existing home with similar features to a new home will cost you less. But when you compare the price of a new home to an existing home, make sure it’s an apples-to-apples comparison. Don’t just consider square footage or number of bedrooms. Location also plays a huge factor in price.
• Quick close: When you buy an existing home, you won’t be stuck waiting around for your builder to install cabinets or floors before you move in. Most transactions close within 30–60 days.6 (That’s just enough time to get packed up!)
• Room to negotiate: As a buyer, you can negotiate the price with the seller. You can also negotiate on things like repairs that need to be done to the house.
• Location: The money you save by buying an existing home could help you afford a home in that neighborhood you’ve always loved. And as they say in the real estate biz, the three most important things to consider when buying a house are location, location and location.

Cons

• Repairs: As homes get older, they need repairs. A new roof or HVAC system could set you back thousands of dollars. So always keep the house’s age in mind when shopping. And an old, inefficient HVAC system could also cost you a lot more on your utility bill.
• Compromises: You probably won’t find a house that checks off every single need and want on your wish list, and you might have to settle for some things you don’t like.
• Updates: The previous owner’s style might not match yours—maybe the paint colors feel off or the fixtures aren’t your taste. So, budget for some updates to make it feel like home. (Just maybe skip the neon green.)
• Environmental concerns: If you buy a really old home, you might run into a situation where you have to take care of mold or harmful chemicals, like lead paint or asbestos tile.
• Hidden problems: Even after you get a home inspection, you could still find problems the inspector missed. (And I 100% recommend getting a home inspection before you buy a house. Don’t skip that part!)

Maybe you’re still on the fence about whether to buy or build a house. I get it—it’s a big decision, and you want to make the right choice! If you’re a first-time home buyer, I recommend going the more affordable route and buying an existing house. You’ll save money and get some homeownership experience before you take on the challenge of building a new house. It’ll also give you time to build equity (your home’s value minus how much you owe on it). When you sell your first home, you can use that equity to help pay to build your next home. If you’re an experienced home buyer, then building a house could be a fun adventure for you. But no matter what, don’t take on a monthly payment that’s more than 25% of your take-home pay—otherwise, you could end up house poor! That 25% limit includes principal, interest, property taxes, homeowners insurance and private mortgage insurance (PMI). And don’t forget to budget for homeowners association (HOA) fees if your new home is in a neighborhood that has them.

At the end of the day, owning a house is an incredible way to build wealth regardless of whether you buy or build—just make sure you can afford the path you choose. Source

Happy Memorial Day!

 

 

"Memorial Day is a day to remember our fallen service members for their ultimate sacrifice,"-Unknown

Happy Memorial Day from us at Work and Associates Home Loans!

(916) 847-3090 

margeate@workhomeloans.com

NMLS ID 394275 | DRE ID 01769353

Money Tips for First-Time Home Buyers

Buying a house for the first time is super exciting—and wild! The process can take some time, and you’ll probably have lots of ups and downs along the way. After all, a home is probably the biggest purchase you’ll ever make.

Pay off all debt and build an emergency fund.

Okay, when you asked for first-time home buyer tips, you probably didn’t expect to hear about paying off debt. But it’s hands-down the most important.

Why? Because owning a home is expensive—trust me, maintenance and mishaps add up fast. It’s hard to maintain margin in your budget when you’re paying the costs of homeownership on top of your debt payments, and that’s a recipe for stress. So, before you even think about buying your first home, pay off all your consumer debt using the debt snowball method. You should also save an emergency fund of 3–6 months of expenses to cover unexpected costs.

Use the 25% rule to figure out how much house you can afford.

Before house hunting, determine how much house you can afford. Your monthly housing costs—including principal, interest, property taxes, home insurance, private mortgage insurance (PMI), and homeowners association (HOA) fees—should be 25% or less of your monthly take-home pay. It may seem like a small number, but here’s the deal, you guys: If more than a fourth of your paycheck goes to your house each month, your house payment can easily turn into a source of constant stress. And every time the house needs some type of repair (which will happen), you’ll feel like it’s the end of the world. That’s called being house poor, and it’s no fun. So don’t do it! Set your budget and stick to it.

Aim for a 20% down payment.

Once you figure out your house budget, it’s time to get serious about saving for a down payment. The more you save, the more house you can afford. It’s hard work, but having a big down payment can be a game changer when you start shopping.

How much? You should shoot for a 20% down payment so your lender won’t make you pay for private mortgage insurance (PMI)—insurance that protects your lender (not you) if you fail to make payments.

If 20% is out of reach for you as a first-time home buyer, a smaller down payment of 5–10% is okay too. Just be ready to pay PMI, which costs anywhere from 0.46–1.5% of your total annual loan balance. Here’s another thing: Your state may offer a down payment assistance program for first-time home buyers, but it’s usually best to stay away from those since they typically offer that “assistance” in the form of extra debt. Unless your state’s program offers a grant that you don’t have to pay back, don’t use it.

Save 3–4% for closing costs.

You should also plan to pay for buyer closing costs, which cover things like inspection and appraisal fees, loan origination and processing fees, property taxes, title insurance, and homeowners insurance. Closing costs for buyers tend to be about 3–4% of the cost of your home, not including the cost of a real estate agent. Some sellers might agree to pay part or all of the buyer’s closing costs to sweeten the deal, but every situation is different. So make sure you plan ahead. Source

Contact us today for more tips! 

Call us: (916) 847-3090

margeate@workhomeloans.com

Imagine Knocking Six Years Off Your Mortgage...

--When it comes to mortgages, most people focus on the obvious questions:

• “What’s my interest rate?”
• “What’s my monthly payment?”
• “Is this the right time to buy?”

And while those are definitely important… there’s one question that often gets overlooked — and yet, it could literally save you years of payments and thousands of dollars in interest.

Let me tell you a quick story.

It started with one simple question…

A few months ago, I was working with a couple who were finalizing their mortgage documents. They were excited — you know, that giddy kind of excitement that comes with finally getting the keys to your own place.

We were going over the loan terms, and I asked them:

“Did you check if there’s a pre-payment penalty on this loan?”

They paused. Looked at each other. Then back at me. “…What’s a pre-payment penalty?”

If you’re wondering the same thing — you’re not alone. Most people don’t realize that some loans come with a penalty if you pay off the mortgage early or even make extra payments outside the normal schedule. And that can be a major roadblock if you’re trying to build equity or save on long-term interest.

Luckily, their loan didn’t have a penalty — which meant we could get strategic. The real numbers that make a big difference, Let’s look at this in plain English — with real-life numbers.

Let’s say you take out a $550,000 mortgage at a 6.5% interest rate...

If you make the minimum monthly payments for 30 years, you’ll end up paying over $714,000 in interest by the time it’s all said and done. But… what if you added just $290/month to your mortgage payment? That’s about $3,500 per year.

Here’s what happens:

• You shave off about 6 years from your loan
• You save over $160,000 in interest payments

That’s a down payment on another property. That’s college tuition for your kid. That’s retirement savings. That’s freedom.

All from one smart move — that only works if your loan allows it.

So, what’s the takeaway?

Always ask:

“Is there a pre-payment penalty on this loan?”

This one simple question gives you the power to make strategic financial decisions that put more money back in your pocket over time.

Here’s the truth:

Sometimes the smartest thing you can do as a homebuyer isn’t just picking the lowest rate — it’s knowing what to ask before you ever sign on the dotted line. And the best part? You don’t have to be a math genius or financial planner to do this. You just need to be informed, ask the right questions, and work with someone who has your back.

(916) 847-3090

margeate@workhomeloans.com

I Dont Have A Down Payment To Buy A House...Is 100% Financing A Thing?

One of the most common things I hear from potential homebuyers — especially first-time buyers is:

“I’d love to buy a home, but I don’t have a down payment.”

Totally understandable. Saving up tens of thousands of dollars while also dealing with rising rent, everyday bills, and just… life, isn’t exactly easy.

So, the big question is —

Is 100% financing still a thing?

The answer: Yes. It still exists. And it’s more accessible than most people think.

Let me break it down for you...

The 100% Financing Option Most Buyers Don’t Know About

A client came to me recently, feeling a little discouraged.

They had a solid job, great credit, and were pre-approved for a mortgage — but the one thing holding them back was the down payment.

They asked, “Isn’t there any way to buy a home without putting 5%, 10%, or even 20% down?”

That’s when I introduced them to a 100% financing option that splits the loan into two parts — no down payment required.

Let’s walk through a real example using a $400,000 home:

• First mortgage (97%) = $388,000
• Second mortgage (3%) = $12,000

That adds up to 100% financing — the entire purchase price covered. You read that right: no down payment needed!

Monthly Payment Breakdown:

Naturally, the next question was: “Okay, so what would my monthly payment look like?”

Here’s the breakdown for the first mortgage:

• Principal & Interest: $2,581
• Estimated Taxes: $500
• Home Insurance: $300
• Mortgage Insurance: $325

That brings the total monthly payment to about $3,706.

Now, here’s the best part:

The second loan — the one covering the last 3% of the purchase — comes with:

• 0% interest
• $0 monthly payment

That’s right. You’re not required to make payments on that second portion, and it doesn’t accrue interest. This setup makes homeownership possible for buyers who are financially stable but just haven’t had the chance to save up for a large down payment.

What You Do Need to Cover

While you don’t need a down payment with this structure, you do still need to account for closing costs. Closing costs typically range from 2% to 4% of the home’s purchase price. In this example, that would be somewhere between $8,000–$16,000.

But here’s a strategy:

Many buyers negotiate a seller credit to help cover these expenses — especially in markets where homes are sitting a little longer and sellers are more flexible. So yes, it’s entirely possible to walk into a home with little to no money out of pocket.

Is 100% Financing Right for You?

Like any loan product, this isn’t a one-size-fits-all solution.

It’s a great option for buyers who have strong income and credit but don’t have liquid cash for a down payment. That said, your eligibility will depend on a few factors, like:

• Income and debt-to-income ratio
• Credit score
• Property location (some programs are specific to certain areas)

That’s where working with a mortgage expert (hi, that’s me) can make a big difference. I’ll walk you through your options, compare loan types, and make sure you understand the pros and cons of each one.

Final Thoughts

If you’ve been holding off on homeownership because of the down payment — it might be time to take a second look. Yes, 100% financing is real. Yes, it’s available in 2025. And yes, with the right guidance, it could be your ticket to finally buying a home of your own.

Want to explore your options or see if you qualify?

Reach out today and let’s chat. A quick conversation could be the start of something big — and it won’t cost you a dime to start.

margeate@workhomeloans.com

916-847-3090

Happy Mothers Day!

 

Happy Mothers Day from us at Work and Associates Home Loans! Hope you had a wonderful weekend celebrating how special you are!

(916) 847-3090

margeate@workhomeloans.com

DRE ID # 01769353

NMLS ID # 394275

Pros and Cons of a Mortgage

 

Advantages of a mortgage

• You’ll achieve homeownership. A mortgage allows you to purchase a home without paying the full purchase price in cash. Without a mortgage, few people would be able to afford to buy a home.
• You can cash in your equity. Equity in your home — the difference between the market value of your home and the amount you owe on the mortgage — can give you access to money when you need it. Many homeowners take out home equity loans or home equity lines of credit (HELOCs) to pay for home improvements, medical bills or college tuition.
• Your credit score may improve. Having a mortgage loan in good standing on your credit report improves your credit score. That credit score determines the interest rate you are offered on other credit products, such as car loans and credit cards.
• You may have extra tax benefits. The tax code currently provides tax benefits of homeownership. You may be eligible for a deduction for the interest paid on your mortgage, private mortgage insurance premiums, points or loan origination fees and real estate taxes. And when you sell your primary residence, you may be able to exclude all or part of your gain on the sale of your home from taxable income.

Disadvantages of a mortgage

• Your risk losing your home. Because your house is collateral for the mortgage, the lender has the right to take your home if you stop making payments. If the lender takes your home in a foreclosure, you’ll also lose any money already paid up to that point.
• Your home’s value could drop. Any property you purchase can lose value over time. If the real estate market drops and your home loses value, you could end up with a mortgage balance greater than the value of your house. This is called being “underwater,” and it can put you in a situation where you have to pay down the loan balance to sell your home since the loan balance is higher than your home is worth.

Source

Historic Windows: Restore or Replace?

 

 

Windows are the eyes of the home. Keeping historic windows is the desire of  a lot of homeowners but they don't always know when it is time to give them up. Come follow along because Brent thinks that historic windows are removed way too soon and too often. 

I Don't Have A Down Payment To Buy A House. Is 100% Financing Still A Thing?

Naturally, the next question was:

“Okay, so what would my monthly payment look like?”

Here’s the breakdown for the first mortgage:

• Principal & Interest: $2,581
• Estimated Taxes: $500
• Home Insurance: $300
• Mortgage Insurance: $325

That brings the total monthly payment to about $3,706.

Now, here’s the best part:

The second loan — the one covering the last 3% of the purchase — comes with:

• 0% interest
• $0 monthly payment

That’s right. You’re not required to make payments on that second portion, and it doesn’t accrue interest.

This setup makes homeownership possible for buyers who are financially stable but just haven’t had the chance to save up for a large down payment.

What You Do Need to Cover;

While you don’t need a down payment with this structure, you do still need to account for closing costs.

Closing costs typically range from 2% to 4% of the home’s purchase price. In this example, that would be somewhere between $8,000–$16,000.

But here’s a strategy:

Many buyers negotiate a seller credit to help cover these expenses — especially in markets where homes are sitting a little longer and sellers are more flexible.

So yes, it’s entirely possible to walk into a home with little to no money out of pocket.

Is 100% Financing Right for You?

Like any loan product, this isn’t a one-size-fits-all solution.

It’s a great option for buyers who have strong income and credit but don’t have liquid cash for a down payment. That said, your eligibility will depend on a few factors, like:

• Income and debt-to-income ratio
• Credit score
• Property location (some programs are specific to certain areas)

Final Thoughts...

If you’ve been holding off on homeownership because of the down payment — it might be time to take a second look. Yes, 100% financing is real. Yes, it’s available in 2025. And yes, with the right guidance, it could be your ticket to finally buying a home of your own.

Want to explore your options or see if you qualify? Reach out today and let’s chat. A quick conversation could be the start of something big — and it won’t cost you a dime to start.

(916) 847-3090

margeate@workhomeloans.com