Down Payment Saving Tips
For many people, the down payment is often the most difficult part of purchasing a home. You may have a good credit score, steady income, and a strong payment history, but it is often challenging to come up with enough savings to afford a 20% down payment, even on a starter home. While you can sometimes get a mortgage with less than a 20% down payment, it is usually tough to do so, especially if you do not qualify for an FHA loan.
At Local Mortgage, we understand that saving for a down payment can be challenging. Our team of mortgage experts tries to make saving easier by helping you find the right type of mortgage product for your particular circumstances, but you will probably still need to save for your down payment. For that reason, today’s blog post will provide some down payment saving tips. Hopefully you consider these tips when performing your mortgage calculations and use them to make the process of purchasing a home easier.
When you first begin mortgage calculations, you will want to have a rough idea of the cost of the house you plan to buy so you know how much to save. You will also want to have a timeline in place for when you would like to purchase a house. With these two things in mind, you can then set up recurring payments to make to a savings account solely used for down payment savings. Saving a set amount each month or paycheck is the single-best way to save money quickly. Simply take the estimated down payment you would like to make and then divide it by the number of months in your timeline, and save that much each month.
Pay Off Debt
It can be almost impossible to save money while you are in debt, particularly debt with high interest rates. While it can be done, it is best to first pay off high-interest debt so that it does not eat away at the amount you set aside to save each month.
Get a Side Gig
In order to maximize the amount you save, you should consider getting a second job or another source of income. While it may not be the most enjoyable use of your time, working a second job for even as little as 10 hours a week can make a major difference in your income and increase your potential to save. It is certainly easier to get a job that pays an hourly wage, but you might also consider working as a freelancer, if your skill set and circumstances allow it.
Lower Your Expenses
Finally, one of the best ways to save money is to lower your expenses each month. It starts with obvious steps like eating out less, going to fewer concerts or sporting events, and only buying essential items. You can also take cutting expenses further by cancelling TV or paid streaming services, eating affordable at-home meals, and kicking expensive bad habits.
Get a Home Loan From Local Mortgage
Hopefully these tips can help you get started saving for a down payment. The team of mortgage experts at Local Mortgage can help you do mortgage calculations and find the right mortgage products for your needs. Contact us when you plan on buying a home.