Strategies To Save For Your Down Payment
Saving For a Down Payment
When looking to buy a home, one of the most important steps is to consider your down payment. The percentage of the purchase price that you can put down for a down payment varies depending on your situation, but after reading our strategies, you will have a plan for how you can save your money and reach your down payment goal.
Strategies To Help You Save For a Down Payment
1. Create a clear savings goal using our mortgage calculator
When you start to consider buying a home, you probably have a general idea of the price point you are looking at. One of the first steps you should take when considering saving for a down payment is to solidify the price point you are looking at. If you're not sure how much house you can afford, you can use our mortgage calculator to figure out what you can afford based on multiple factors like your annual income, down payment percentage, different types of loans, etc.
After using the mortgage calculator or other methods, you should have an idea of how much you need to save in order to put down an appropriate down payment. Now it's time to figure out how you are going to save that money over time while still paying the bills.
2. Analyze Your Spending and Create a Budget
One of the best things you can do once you have a clear goal in mind is to review your bank statements from previous months. Creating a budget will help you realize any areas of your spending that you can cut back on, instead, putting that money towards a down payment. If you find out that you are eating out way too much, maybe it's time to ask a family member for some great recipes to cook at home more often. If you find yourself consistently spending money on new clothes every month, it might be a good time to put a pause on the trendsetting until you've reached your down payment goal.
3. Pay Off Any Debts
You might be thinking that putting money anywhere that isn't your down payment savings is counterproductive, but paying off any debts you have will actually help you save money in the long term. Student loans and credit card balances are typically high-interest debts, and can disqualify you from certain types of loans and prevent you from being able to save enough money every month to reach your down payment goal in a reasonable length of time.
4. Increase Your Monthly Income
If you've created a budget and cut down on your expenses and still don't think you are going to hit your savings goal in the time you want, it could be time to look at increasing your monthly income through a second job or a side hustle.
It all depends on your situation, but a second job will put you on the fast track towards making that down payment possible. If a second job isn't the best option for you, you can always look at side hustles to earn more money. Uber and Lyft are great ways to make some money on the side if you don't mind driving people around town, or you could do some freelancing work and flex those creative muscles from your living room.
5. Contact a Member of Our Team To Learn More About Buying A Home
By now you should have a good idea of what size down payment you can work toward, and a plan on how you are going to get there. If anything in your plan changes, you can always refer back to our mortgage calculator to figure out the best option for you, or contact a member of our team to schedule a consultation. Our agents make your goals for buying a home their priority, and work hard to see those goals realized.