Tips for Saving Up for a Down Payment
A big deterrent for some prospective home buyers is the large amount of cash you need to save for a down payment. However, according to data from a U.S. Census housing survey, nearly 50 percent of current homeowners made down payments of 10 percent or less. So saving for a home may not be as big of a hurdle as you originally thought. Here’s some tips to help you kick off your savings.
Get the Numbers
Start by getting prequalified for the loan amount you can afford. This will give you a better and more concrete idea of how much you’ll have to save for a down payment.
Create a Budget
We all put money away when we can, however that won’t help reach your down payment goal very easily. Set an intentional budget for your monthly expenses, it may be tedious, but if you write down every penny that comes in and goes out each month, you’ll know where you stand.
Set a Monthly Savings Amount
Once you have a better understanding of how much money you spend in a month, you can determine how much money you can put away each month. If money is tight, you can either: reduce the amount of money spent or boost your income with a side job.
Cut Back on Spending
We don’t normally look at our spending on a daily basis, but it might be a good thing to examine when trying to save. Certain expenses are fixed, but you can almost always find expenses that you can forgo - going out for coffee, take out, shopping sprees, etc.
Boost Your Income
There are so many second job options now available, and some right from the comfort of your own home and with the ability to make your own hours. Such as selling on ebay, creating an etsy shop, freelance writing, driving for Uber or Lyft, or delivering food for apps like DoorDash.
Pay Off Debt
Saving money while paying off credit cards, car payments, and other forms of debt can make it tricky. Prioritize paying off your personal debts with the highest interest rates first.
We all enjoy the occasional “treat your self” purchase when we receive a tax return, bonus, or just some “extra cash” but adding that to your down payment fund can pay off in the long run.
At Verani Realty, we have years of experience helping people achieve their dream of homeownership. Contact us to learn more about what we can do for you.
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