One common concern for first-time homebuyers is whether they can afford the cost of purchasing a home. Many people feel trapped in the cycle of renting because the money for closing and down payment can seem impossible to save for.
If you’ve been worried about this, Governor Gretchen Whitmer recently created a program that can help first-time homebuyers in Michigan reach their savings goals for homeownership.
What Exactly is the New Program?
The Michigan First-Time Homebuyers Savings Program is a tax-exempt savings account that can be used to put towards buying an individual’s first home. With this account, all contributions, interest, and qualified withdrawals are exempt from taxation.
A single person is eligible for up to $5,000 worth of tax-exempt contributions, while joint filers would be eligible for up to $10,000 tax-exempt contributions.
Who Can Qualify for The Michigan First-Time Homebuyer Savings Program?
To be considered a first-time homebuyer, it doesn’t technically have to be your first time purchasing a home. The state of Michigan considers a first-time homebuyer as someone who hasn’t owned a home in the past 3-years.
How to Make the Best Use of Your Account
When saving for a new home, every penny can help streamline the purchasing process and get you into your new home. Making regular deposits into your account can help you hit your savings goal quickly.
It’s easy to talk about making deposits into your account but finding that extra money can seem daunting. Consider using some of the following tips to start saving money:
Cancel unused subscriptions. Look at your monthly statement for any subscriptions that are unused or simply not used enough. Once you cancel those subscriptions, set that money aside in your new account.
Set up your bank account to automatically transfer funds to your new account. You can start small with only a percentage of your income automatically transferring and once you’re comfortable, increase the percentage transferred.
Use a Roundup Saving Application. Some banking applications will round up to the nearest dollar on recent purchases and transfer the difference to your savings account. While it may only be pennies at a time, this money can add up quickly!
Leverage bank and credit card rewards. To encourage customer loyalty, banks and credit card companies will use incentives like increased interest rates on accounts and cash back rewards on purchases. Using these rewards can free up some extra money to put into your new savings account.
This is an exciting time to be a first-time home buyer in Michigan. If you’ve been putting off your dream of homeownership because you’re concerned about saving, this new program can help make the process easier. Contact Julie Krumholz from Superior National Bank for more information on the program and how you can make it work for you!
About Michigan Lender, Julie Krumholz
With 35 years of industry experience, Julie Krumholz has worked in nearly all aspects of mortgage banking.
Throughout the years she has worked in processing, closing and loan origination, underwriting, QC auditing and has even co-owned a mortgage brokerage firm.
If you are looking for an experienced Lender in Michigan, call Julie from Superior National Bank today at: 586-382-5482 and let her help you navigate through the loan process and answer any questions you may have.
