saving for down payment Archives

test1test1

Since the moment you decided to buy a home of your own, you have probably heard it all by now. Save for a down payment, plan ahead, gather all the paperwork, increase your income and all that jazz. And while you go through all that process and preparation, there are a few struggles that you need to deal with as you go on.

For starters, applying for a loan can be quite strenuous. Getting approval means you need to go through the necessary steps to qualify and that has its own hurdles. House hunting is another thing, too. You need to look for the perfect house that fits your needs. You need to know that the property you’re about to purchase is something that you can live in for the long haul. These are only some of the few things you need to go through when buying a house.

Along with those things, there’s definitely no denying that saving money for a down payment could be a little tricky especially if you aren’t very particular about it. Sure, there are home loans that come with lower or no down payment required. But on the surface, buying a house doesn’t come cheap. But there are simple ways that could help meet your goal in saving enough money to put down for a house. Here are some ways:

Try a side hustle

If you have extra time on your hands, you might want to monetize a skill that you are a master of. If you are a crafty person, maybe it’s a good idea to put your creation out there. Sell a product you know how to do. These days, people are into homemade and/or products that are easy to learn. If you like that, you can make some and sell it to your friends too.

Other than that, your side hustle could be something like tutoring, copywriting or even dog sitting. If you are willing, profits from extra income could help add up to your savings.

Consult our lenders here.

Prioritize your expenses

Know where your money should go. List things of importance. Sacrifice some of those that you don’t really need. The goal is to end up with more money saved than spent.

These could come from the simplest things. If you already have a lot of clothes, maybe you could forgo the latest fashion sale in the market. Subscriptions could be cut down, too. For example, if you don’t need cable subscription because you spend most of your time at work or you’d rather watch your favorite shows on your phone then you can cut that down from your expenses, too.

Try not to add up more debt

This is something you hear quite a lot. But then it bears repeating, too. Minimize your credit card usage as much as possible and don’t add a new credit card on your account. That would only encourage you to spend some more. This doesn’t only make you owe more money. It could also put a dent in your credit score which could lessen your chances of qualifying for a home loan.

Write it all down

It’s quite helpful if you track all your expenses and savings. This way, you would know where your money is going. It’s also a good strategy if you want to evaluate and restructure your spending habits. In the end, it pays to be on top of all your finances.

Click to See the Latest Mortgage Rates»

Homebuyers sure are lucky these days; they can buy a home with as little to no down payment. Indeed, you can get an FHA loan with 3.5% down payment or a conventional mortgage under their special programs for first-timers.

Don’t let a down payment pose a hurdle to your homeownership, especially if you can save up for it. We have rounded up some practical ideas to help you save for your down payment.

Start looking for mortgage deals here.»

Before you start any savings plan, know your timeframe for buying a home and always start with a budget to work around.

Set a price range for a home you can comfortably afford to pay for the down payment and the monthly mortgage amortization and maintenance costs. Say, a home with a price tag of $200,000 can have a down payment of $7,000 if at 3.5%.

Tip 1: Power Save

Take a look at traditional and modern ways to store your hard-earned money.

Open a savings account. Find a bank that offers a higher savings account rate to grow your money. But be wary of too-good-to-be-true rates because they might just turn out to be that. Same with credit unions. You can seek out those that offer competitive rates. Ask your friends, co-workers or family members of credit unions that they can recommend.
Automate your savings. Often the best way to save is to do it fast enough. There are finance apps that do the saving for you; they analyze your spending habits, how much you can afford to set aside for savings, and automatically transfer those amounts into a checking account. There are minimal costs in maintaining these apps.
Take on a money challenge. A good example is the 52-week challenge, which in its simplest form can rack up $1,378 or in another increment up to almost $7,000 in a year. You can tweak your savings timetable, starting with the bigger amounts during the start of the year and working towards the lower amounts as the year ends.

Shop and compare loans and rates.»

Tip 2: Automate (Your Bills)

If you can automate your savings, you surely can automate your bills payment. Enroll your biller, e.g. utility, insurance, credit card, and more in your debit card for auto-payment every month.

This not only spares you from withdrawing cash and spending it elsewhere, it makes you current on your accounts. Ultimately, you won’t incur late fees or accumulated charges especially on credit cards. It would be a plus on your credit report, too.

Tip 3: Invest

It certainly pays to have funds for investment, aside from the money you safely put in your deposit accounts. If you’re new to investing, research first about mutual funds, bonds, instruments or any type of investment that can be for short-term or long-term as you deem.

Remember, you won’t get rich overnight by investing and there is a risk to lose money as there is a chance to gain some. That’s why it’s important to understand the risks and gains in investing.

Final thought: Cut down on any unnecessary expense and where else you can save for now. Nothing beats the joy of owning a home that you have worked hard for.

Let’s help you find a lender.»

Eyes On The Prize: Ways To Save For a Down Payment On a Home