TIPS FOR SAVING YOUR DOWN PAYMENT
Sick of renting? Wanting to become a homeowner? Unless you have stockpiled cash, you are going to need a home loan and a down payment. Home loans are all very different with different down payment requirements. That will need to be a whole different blog! But, typical down payments are between 10 to 20 percent of the total price. So, what are some tips on how to save up for that down payment?
Goal and Timeframe
Saving up for a down payment can take quite a bit of time. But the timeframe is ultimately up to you and your finances. You will need to have a plan. By having a plan, you will stand a much better chance of achieving your goal sooner than later. Decide how much you want to save and divide that by how many months you have chosen as your timeframe. 24 months, 12 months, or 6 months? This will all depend on your budget and what you can financially afford to set aside.
Is there money you are spending that you could be saving instead? Take a good look at your bank statements and start tracking all of your expenses. Where is your money going? Are there some areas you can cut back on or just cut out completely? Here are some ideas:
- Take a break from the gym and workout at home
- Do you REALLY need that high-priced coffee?
- Bring your lunch from home and save on the take-out
- Recurring subscriptions – Do you really need some of them?
- Stop impulse buying. Think “If nobody were to see this, would I still want it?”
Be creative and think of more ways to cut expenses. You will be surprised at how quickly the amount of money you can save will add up!
Get a Second Job
Is getting a second job really going to help? Say you work 16 hours a week making $10 an hour. That’s approximately $120 per week after taxes! (Figuring 25% for taxes) If you were to do that for an entire year, you’ll save more than $6,200 to put towards your down payment!
Speak to a Mortgage Loan Expert
Contact a mortgage loan expert. They can help you find the right home loan and guide you through the process. They can also advise you on options they might have with government incentives, or programs for first-time home buyers. They will know what will work for you and can possibly help reduce how much you have to pay out of pocket.
My Final Thoughts
By knowing your goal and timeframe, you can put your savings plan in place and be on your way to buying and owning your own home. Don’t forget to contact a mortgage loan expert to seek financial advise. Contact us at NextHome TriState Realty (712-224-6398) and our knowledgeable agents can help you with the necessary steps that will get you to your ultimate goal of homeownership.