For many people, saving a down payment is the hardest part of owning a home. Ideally, you’ll want a 20% down payment so you can qualify for a mortgage with the widest range of lenders and get the most competitive rates. But even if you don’t plan on putting in that much money, most lenders charge at least 3%.
How can you quickly save for a down payment on your home so that you can move into a place of your own? These four tips can help.
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1. Rework your budget
If you’re hoping to save enough for a down payment quickly, you should revisit your budget to make it a priority. Consider redirecting money from other non-essential expenses, such as your dining or entertainment budget.
To determine how much to save, figure out how much you need for a down payment and what your deadline is. This will allow you to determine exactly how much to set aside each month. For example, if you need a down payment of $ 25,000 in a year, you will need to save $ 2,083 per month. Try to budget as close to that amount as possible, even if it means cutting other things.
Remember, the sacrifice you make is temporary and you don’t have to take all the fun out of your budget forever. You can even keep a photo of your dream home in your wallet on top of your credit cards. So when you spend the money, you will remember what the sacrifice is for.
2. Consider a side concert
Doing a little extra work on the side could give you more money to put in your down payment account. Whether it’s working overtime at your job or using one of the many apps that allow you to earn money by performing various tasks during your downtime, every extra dollar you can earn will bring you closer to home ownership.
3. Review grant and aid programs
If you’ve never bought a home before, or your income isn’t very high, there may be state or federal assistance programs designed to help you save a down payment and buy a home.
You can find out about some of these sources of help by visiting the website of the Department of Housing and Urban Planning.
4. Save your deals
There may be times when you get unexpected cash. It could be a tax return, a work premium or a holiday gift.
When you receive extra money that you didn’t expect, immediately put it into a down payment to increase the amount you’ve set aside for your future home. If your loved ones ask you what you want for the holidays or for your birthday, you can also ask them for a contribution towards the purchase of your house instead of gifts.
By reworking your budget to regularly set aside more money, exploring programs designed to help you become a homeowner, saving your windfall earnings, and earning extra income, you should be able to save for a down payment faster than you can. never would have imagined. Just make sure you’re otherwise financially prepared to buy a home, then keep shopping around for the perfect mortgage lender and the home of your dreams.