How to Save for Your First Home Down Payment
You want to stop renting and own a home of your own. It’s a common dream across America. However, one of the biggest barriers for many people who are interested in purchasing a home is the size of the down payment that you need. The common perception is that lenders will require that the buyers have a down payment of at least 20% of the price of the home loan.
Luckily, there are programs for first time homeowners such as the FHA financing which will allow a loan at 3.5%. Click here to learn more about more programs for home buyers.
Regardless of the percentage and size of your down payment, it may feel overwhelming. Here are some strategies you can implement to start saving for the down payment for your first home.
Get a Part Time Job
While this might not always be feasible, getting a second job and saving all of the money that you earn can help you to put away money for the down payment. Even if you are unable to get another job right now, you can consider some ways to turn hobbies into money, such as starting a blog and monetizing it. Every little bit will help to get you closer to your down payment.
Down Payment Assistance Programs
Many people do not realize there are several programs available to assist homebuyers. The National Homebuyers Fund is one example. They can provide assistance via grants to many buyers, as long as you qualify. There are often income requirements for these types of programs, so check out several to see whether you can qualify or not.
Pay Off Your Debt
If you are carrying credit card debt. The interest you are paying on the credit cards is money that you are essentially wasting each month. Over the course of a year, you could be paying hundred, or even thousands of dollars in interest. Paying off your credit cards, and keeping them paid off can put more money into your pocket each year, which you can save in a high interest savings account for your down payment.
Downsize Your Life
Take stock of your current lifestyle and the things that you are doing. Chances are good that you are spending far more money than you realize. If you have cable, and you are spending $80 a month on it, cutting the cable would help you save close to a thousand a year. Cutting other things out of your life that you don’t need could help you save thousands more.
Even though it might seem impossible to save for a down payment right now, you can do it if you put your mind to it and are willing to make some sacrifices. Contact our office today for additional tips and to find out how you can start on your road to homeownership.