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Introduction

The idea of owning a summer home can be delightful. Mark Roemer believes that a summer home can be the perfect destination to relax your mind and body during the vacation. However, for most people, buying a second home is not so easy. You must save money diligently in order to achieve your goal. Otherwise, you can fall into a trap that will lead you into more debt than you can afford.

 

The Tips

Follow the tips below to save for a summer home -

 

1. Analyze your current expenses and savings - Before you start looking for a summer home, you must figure out your budget. In order to do that, you must consider all your expenses both in the short-term and in the long-term. Buying a vacation home can be very expensive. So, you must make sure that you can really afford it.

 

Be sure to factor in any debts you must pay. Try to clear all the short-term debts before setting your budget as it will be easier to set aside money for your second home.

 

After deducting all the current expenses from your total income, you can calculate your total savings. However, you also must consider a few things before you set that money aside for buying your second home. For example, are you saving some money or investing some amount for your retirement? Do you have an emergency fund in place? Are you saving money for your kids’ education? These are all priorities. The remaining money you save after taking care of all these expenses should be utilized towards buying a summer home.

 

2. Determine your budget - Once you know your monthly savings and the time frame within which you want to buy your summer home, you can determine your budget. Alternatively, you can select your house first and determine how long you need to save money to reach the down payment goal.

 

Consult with a mortgage lender to figure out the best option for you.

 

Normally, the down payment for a house can range from 10%-20% of the total price. Aside from that, you also have to take into account the money you need to pay for homeowner’s insurance, property management, and the closing costs. Consider setting aside 1%-2% of the total price of the property for maintenance purposes. This will include lawn care, general property repairs, utility bills, property taxes, etc.

 

The closing costs can range from 2%-5% of the total price of the property.

 

3. Reduce your expenses - The next step is to keep your expenses in check. Every household has a different kind of lifestyle. So, there are no strict spending habits that you can follow. Just try to reduce the unnecessary spending habits so that you can save a little more. For example, you may cancel your gym membership and workout at home

 

4. Increase your monthly income - An alternative to reducing your expenses is to increase your monthly income. Every bit of money will help you to reach your goal faster. Consider working overtime, starting a side business or looking for a higher paying job if you can.

 

Conclusion

Mark Roemer believes that people who have a solid plan and acts diligently can afford to buy a summer home if their income allows it. If you don’t have the discipline to save money, you are more likely to fail.