Tips to Save Up for Your Down Payment
You’re watching the housing market and you think you’re ready to stop paying someone else’s mortgage statement each month. You’ve taken a look at some online mortgage payment calculators, scoped out where you want to lay down some roots, and have an idea of the financial commitment necessary to make this dream a reality. Saving for a down payment takes some planning and financial discipline.
Did you know that you can put as little as 3% of the sales price down on a home? However, the more you can put down, the less interest you will be paying throughout the loan duration. If you put more than 20% of the sales price down on the home, you can eliminate the Primary Mortgage Insurance, or PMI, that lenders typically add to any conventional loan that has less than a 20% down payment.
Determine Your Food Essentials
Controlling your spending is going to help you set extra money aside to reach your down payment goal. You do not have to sacrifice good food, but you should see if you can buy generic items rather than name brand, buy food that you need just for the week, and look at alternative ways to procure your meats, fruits, and veggies.
Eliminating pricey meals at restaurants or special coffees can also help put more money into your accounts. Who knows, you might like some of the things you create over what you’re used to buying regularly.
Cancel Unused Subscriptions
Another way to reduce costs is to look at your subscriptions to magazines, streaming services, and more. Is every subscription you have being utilized? If not, cut them.
Consider a Side Job
Getting a side job can help you get into that new house quicker, but it’s easier said than done. You should consider whether it’s something that complements your current profession or if you want to do something that you enjoy. There are a lot of creative side hustles – find one that works for you.
Redirect Retirement Funds
Consider temporarily diverting your retirement savings to your savings account for the down payment. Depending on how close you are to your preferred percentage down, this redirect could be minimal. Do not jeopardize your retirement in any way, but it could be a quicker way to get into the house. Then, once you’re settled, you can redirect funds back into your retirement.
Use Monetary Gifts
If a relative offers help for a down payment, take it. Lenders typically allow borrowers to use monetary gifts for a portion of a down payment. A Gift Letter is normally required from the relative and states that the funds are a gift with no repayment necessary.
How you get to saving your money for a down payment on a home needs to work for you and your family. It’s important to have a plan in place and stick to it. It’s worth it. I promise! If you have any questions about pre-approvals, mortgages, or anything related to real estate that the Jen Martinez team can help with, please reach out at (813) 480-4747 or send me an email!
All information provided in this publication is for informational and educational purposes only, and in no way is any of the content contained herein to be construed as financial, investment, or legal advice or instruction. CrossCountry Mortgage, LLC (“CrossCountry”) does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. Some information in the publication may have been provided by third parties and has not necessarily been verified by CrossCountry.