Buying a new home can be an exciting yet daunting experience. Where do you begin? What type of mortgage is best? How much money do you need? Well, the first two answers are simple, and they both start with finding a mortgage loan officer. Your mortgage loan officer will listen to your needs and wants, as well as review your financial situation. With all of this information, they will determine the best mortgage product for you. Different mortgages have different features; however, having the money for a down payment is beneficial no matter what kind of loan product is recommended. Here are a few ways to help you save and establish a down payment for your new home.
Establish a Dedicated Savings Account and Transfer Schedule
Having a specific, ear-marked account for your down payment is an easy and convenient way to build your nest egg. You can specify an amount or percentage of your paycheck to be directly deposited each month and watch it grow.
Create and Follow an Effective Budget
Understanding how your money is spent, and where it goes each month is critical to establishing a reasonable and attainable savings plan. Categorizing your major expenses like rent, insurance, groceries, utilities, and more will help you understand your fixed expenses and therefore determine a reasonable savings goal each month. After all, you can only meet your savings goal if you have money left over once your fixed expenses are paid! Reviewing bank and credit card statements will highlight your spending habits and may reveal new saving opportunities.
Look for Ways to Reduce Expenses
Cutting corners and trimming down what you spend regularly may leave you with extra cash on hand that can be set aside for a down payment.
Whether you opt to eat out less, adjust your cable or streaming options for a lower bill, or make other spending changes, hopefully, you can reallocate funds toward your down payment goal.
Increase Your Income
Whether you ask for a raise in your current job or pick up extra work on the side, increasing the amount of money you bring home each month will also lead to a boost in your ability to save. Compare your current salary to similar jobs at other companies, this may tell you what the market value is for your role, and approach your supervisor during your annual review with reasons why you deserve a pay increase. You could also pick up extra jobs, freelance projects, or other work in your free time. Even on a temporary basis, these extra income streams may go a long way towards saving for that down payment!
For over 90 years, the expert staff at Standard Mortgage (NMLS#: 44912) have been helping homebuyers purchase and refinance their homes. Find a loan officer in your area today and take the first step to buy your new home.