It can be tricky to save up enough money for a down payment on a house.
But with a little bit of organization and foresight, it is definitely doable.
Here are some easy ways to make that happen:
Figure out how much you can afford to spend on a house.
The best way to figure this out is to talk to a loan officer. A loan officer will be able to help provide guidance on which loan program is a good fit and what the down payment and monthly payment requirements would be.
A common recommendation is to devote 30% of your income to housing costs, including mortgage payments, taxes, utilities and insurance.
Once you know which mortgage type you are going to be using, it’s time to come up with a gameplan on how to save.
An experienced loan officer can look at your qualifying factors and tell you whether you’ll get approved for a loan or not. How a Mortgage Loan Officer can Help you from Start to Finish
Save your windfalls
If you get a bonus at work, or come into some money from a different source, put it towards your down payment savings.
This is a great way to make progress without making any significant changes to your budget.
Create a budget and stick to it
Saving for a down payment can be difficult if you’re not used to living on a budget.
But it’s essential if you want to buy a house in the near future.
Track your spending for a month and see where you could cut back. Maybe you could brown bag your lunch once or twice a week or cancel that gym membership you never use.
Set aside money each month
Another way to save for a down payment is to set aside a fixed amount of money each month.
Think of it as a loan that you need to pay, which means if you don’t make the loan payment, it could hurt your credit.
This might mean skipping a few lattes or delaying that new car purchase, but it will be worth it in the end.
Automatically transfer a fixed amount of money from your checking account to your savings account every month. This will help you save without even noticing.
Get help from your family and friends.
If you have family or friends who are willing to help, ask them to contribute to your down payment savings.
This could be in the form of a a one-lump gift or even a contribution to your savings account.
Create or join a savings group with friends or family members. This can help you pool your resources and make saving for a down payment easier.
Consider a side hustle.
If you’re really serious about saving for a down payment, consider picking up a side hustle. There are many ways to make extra money, so there’s no need to feel limited.
Sell some of your stuff on Craigslist, babysit on the weekends or do some freelance work.
Sell unwanted items online or at a garage sale. This can help you free up some extra cash to put towards your down payment fund.
Invest in a high-yield savings account or certificate of deposit (CD)
This will provide you with a little bit of extra income each month, which can be put towards your down payment savings goal.
Reduce your expenses wherever possible.
There are likely areas where you can cut back without too much difficulty, which will leave more money in your budget to save.
When it comes to saving for a down payment, anything goes. Just be creative and stay focused on your goal. With a little bit of hard work, you’ll be able to buy your dream home in no time.
So what are you waiting for? Start saving today!
Contact us today! We would be happy to go over your specific situation and give you our expert opinion. Give us a call (858-766-6357) or fill out our online form to get started. We look forward to hearing from you!
More info that may interest you:
- Are property taxes included in the mortgage?
- Property Taxes
- What are the 4 c’s of credit?
- What is an appraisal contingency?
- Flying Solo: Purchasing a Home Without Your Spouse in Texas
- The Real Reason Underwriters Deny Loans – What You Need to Know
- Stretch Your Home Buying Budget with a 40-Year Mortgage
- Save Money on Your Mortgage with a No Closing Cost Option
- Co-Borrowers on a Mortgage: Everything You Need to Know
- Maximize Your Home Buying Budget: Lender Credits 101