If buying a house is one of your lifelong dreams, then you should start saving as soon as possible for the down payment. While banks and lenders can provide you with a loan, you still need to come up with a down payment out of pocket or from other sources.
Whether you are thinking of buying one of the homes for sale in Eagle Idaho or elsewhere in the state, you will still need to have your down payment ready before you can move forward with your dream acquisition.
The trick to saving for a house is to start early. At the first opportunity, start setting aside money for this dream of yours. How do you do this with all the expenses that you face day in and day out? There are tips that can help.
How to save for a down payment and for repayments thereafter
Determine how much you need – talk to a lender about how much you can take out as a mortgage for your future home. The down payment for your home is usually a fraction of the total mortgage you are qualified for.
The down payment that most lenders and banks ask from buyers when they consider purchasing a home is usually 20%. However, this percentage is usually the maximum amount that you can put down on a house. In reality, you can actually pay as little as 3.5%.
Once you determine what percentage you can comfortably shell-out, know the value of the house you have your eyes on, calculate how much you need to save.
Set up a timeframe – to reach your goal, you need to set the amount of time to save for a home.
For example, if you need to come up with $30,000 for a down payment and your timeframe is in three years, you should save $10,000 every year, or around $843 every month.
Figure out a way to save money – this is probably one of the toughest things to do since you have regular expenses and need to save some money in the bank for emergencies.
To save up enough money for one of those homes you have your eyes on, you might need to get creative. Some things you can try to include investing in the stock market and investing in cryptocurrencies, but these are high-risk vehicles and can make you lose money instead of earning. Your safest bet would be to deposit the amount you set for each month in the bank.
Find a way to earn extra – if your current situation leaves you only a little extra to save for your house, you should find a way to earn extra. You can either take on another job or adjust your spending habits so you have more than you actually need.
Keep your goal in sight and you will find that whatever sacrifices you make to save up for your home will be worth it.
Automate your savings process – to ensure that you don’t forget to set aside the right amount every month or every payroll for your home-buying goal, you should automate the saving process. You can have a part of your salary deposited directly into a savings account for this particular purpose.
Save any extra blessings you get – whenever you get a bonus at work or have extra money from an income tax refund, put these in the bank. You can treat yourself with part of this windfall but putting most of it away will help you save faster and give you more funds to work with when the time comes to buy a house. You might end up buying one of those homes sooner if you hit your target faster.
Funnel retirement funds into your down payment – put your retirement fund on hold and funnel these over to your savings. Just make sure to keep this a short-term plan and you don’t get used to it that you end up using your 401(k) funds to pay off your mortgage in the future.
Ask for gift money – instead of gifts for certain occasions, ask friends and family to help you save up for a down payment instead. They’re likely to gift you with cash for this particular goal than anything else. After all, who doesn’t want a loved one to buy their own home?
Word of Caution: If you receive gift money during the buying process you may need to show the paper trail including bank accounts from a loved one.
Getting the money you need to buy a house may seem like a challenge but it’s not impossible to overcome. All you need to do is to have a plan and set it in motion. Before you know it, you will have more than enough for your home-buying needs.
Whether you are planning to purchase one of those new homes for sale in Eagle Idaho or are looking to buy elsewhere, having a plan of action guarantees success. Make sure to hire a real estate agent when you’re ready to buy. Contact us and you’ll get the best deal for your money.