How to Save for Your Down Payment
With enough time and creative budgeting techniques you can save enough money for a down payment for your new home. We’re here to provide you with a few tips so that you can reach your goal sooner than you think!
Budget Break Down
Start by analyzing your monthly budget before you consider a home purchase. This will help you realize how much money you’re spending each month on utilities and rent and how much you can actually save towards your down payment each month. You will also be able to set realistic expectations and concrete goals.
First, make a list of all of your necessary monthly expenditures and add these expenditures up and subtract them from your monthly take-home pay. Then, look at everything that is listed and start analyzing what items you’re able to get rid of each month.
Now you can determine what home price you could comfortably afford based on your current monthly budget.
Set a Concrete Savings Goal
Now that you have an idea of how much money you’ll need to put down toward your new home, it’s time to make sure that you have a timeline and realistic expectations of how long it will take you to save for that down payment. Here’s an example, if you need to save up $20,000 for a down payment and want to move in five years, then in order to reach that goal you’ll need to save around $335 per month.
Get Pre-approved for a Mortgage
Now it’s time to take the next crucial step to buying your new home. At this point in the process, it’s a good idea to meet with a mortgage lender in order to get pre-approved and figure out if they’re any blemishes on your credit that you might need to clear.
Pre-qualifying for a mortgage will let you know how much financing you may qualify for — and how much you’ll need to save for your down payment and closing costs. The mortgage professional will then provide you with lots of options when you’re searching for homes.
Celebrate Your Accomplishments
Every time you reach a major milestone, be sure to congratulate yourself because saving for a down payment is not easy!
So, go ahead and treat yourself to something special, but not too expensive, to reward yourself for your hard work!
Consider Home Buying Assistance Programs
Are you still having trouble saving for a down payment? It might be worth looking into home buying assistance programs, such as FHA loans, VA loans, and USDA loans.
How Can We Help You Achieve Your Goals?
Movementum Realty is always available and ready to help you achieve your home buying goals!