You’ve done the research, you’ve discussed everything with your family and now, finally: it’s time for you to start searching for your first home.
The homebuying process is filled with excitement, but for some people, it can also be filled with doubt and worry. One question that is always a source of angst in first-time homebuyers is that of: “how much should I save for my down payment?”
In this guide, we will answer the above question while also outlining the best tips for how to start saving so that you can get into your dream home as quickly as possible. The experts at Rex Homes have also provided this helpful guide on their blog here: https://blog.rexhomes.com/down-payment-savings-guide/
How Do I Know If I’m Saving Enough for My House Down Payment?
Depending on who you ask, you may receive some different answers to this question. However, most mortgage professionals would agree that you should aim to save about 20% of the value of your home to be used for your down payment. While this may seem like a lot of money, it’s worth it due to the fact that you will save thousands over the life of your loan and you will look like a much more favorable candidate to your lender.
What Are the Best Ways to Save for My House Down Payment?
The following three ways are some of the best and easiest methods for increasing your house down payment savings:
1. Save Unexpected Earnings. Resist the temptation to spend that bonus from work on something frivolous! Any unexpected money you receive from a death in the family, a raise at work, or any other situation should go immediately toward your savings. While you may want to spend the money immediately, think of your future and bank the money right away. You’ll be happy you did in the long run.
2. Create a Strict Budget. No one wants to be on a budget, but it is one of the best ways to ensure you’re saving enough for your down payment. It’s important to take some time and really define what you need to spend money on each month and where you can save a few bucks.
3. Think Outside the Box. There are many “non-traditional” ways to save for your down payment as well. For example, you may consider picking up an extra side job such as teaching music lessons (if your skills enable you to do so) or dog walking. While these side jobs may not pay much, every penny helps.
While saving for your house down payment is often a stressful experience, it doesn’t have to be. All you need to do is take things one day at a time by saving your unexpected earnings, maintaining a strict budget, and thinking outside the box for more ways to save.
If you’re finding that you aren’t quite sure if you’re taking the proper steps in saving toward your house down payment, a qualified mortgage professional can help. Call today for a consultation!