How to Save Up for a Down Payment for a House
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Is your apartment getting too small or is your family outgrowing your current house? Moving might be the easy decision until you think about a down payment and a mortgage. But saving up for a down payment for a house doesn’t have to be stressful!
3 Steps to Save Up for a Down Payment
- The first step is to determine is how much money you will need to save. Before you can start saving for your house, you need to know how much money you need to save for a down payment. To figure out what you can afford, sit down with a mortgage lender. A mortgage lender will tell you how much of mortgage you qualify for.
- The second step is to figure out a plan/timeline to save for a down payment. Set a reasonable goal for when you want to move and save your money based on the time frame you set.
- The last step is to save! There are many easy things you can do to start saving the you need money for your future house.
8 Strategies for Saving Up for a Down Payment
- Set up an savings account: This will be the account where you put the money you are saving into each month. To put this money in a separate account, it ensure that you won’t spend it.
- Cut out vacations: Vacations can cost a lot of money. Cutting out vacations is an easy way to save money for a down payment.
- Eliminate unnecessary expenses: Go back and look at all of last month’s purchases. Was everything you purchased necessary? Look for purchases you can reduce or eliminate so you can put that money towards your down payment. Do the same for last month’s bills.
- Pay off high interest rate credit cards: High interest on credit cards can be costly. Pay off the highest interest rate credit card and then close the card. Do the same for the next highest card.
- Borrow money: Don’t be embarrassed to ask to borrow money. Many family members and friends are always willing to loan money when it comes to a down payment on a first house.
- Use money from your retirement plan: Check with your Human Resources or Payroll department to see if your company-sponsored 401k allows you to borrow money to buy a house.
- Get a part-time job: Paychecks from a second job are a great source of money for a down payment. You can set up that these paychecks be deposited directly into the savings accounts.
- Get down payment assistance: There are several organizations and programs that can help you with a down payment.
The process of buying a home can be a long one. There is no denying that. Even though the process is long, it doesn’t have to be hard. These three steps make the process a lot easier and stress free.