We understand, you are excited, overwhelmed, and a little bit distressed about all the steps that come with buying a new home. The daunting down payment can be weighing on your mind but, with these simple steps, you can be a little more at ease with your exciting transition.
1) Open A Savings Account
Talk to your bank about setting up a savings account under your current checking account. With this you can easily transfer money from your checking account to your savings right away and from anywhere! But before you set up a savings account… you need money to save.
2) Quick Tips to Save
- Start eating out only 2 times a week at max. The average person spends about $250 a month on eating out.
- Analyze the best brands for the prices when grocery or supply shopping. Generic brands typically cost less than big name brands. This could save you up to $150/month.
- Consider cutting out cable. With the internet these days, you can find most of your favorite shows online. Getting rid of the monthly cost of cable can save you up to $60/month.
What seems like small amounts to save, can add up to $500 a month. That is an extra $6,000 a year!
2) Check Your Credit
The overall cost of your down payment and options to borrow are all dependent on your credit score. If you are in good standing with your credit score, it may be possible to create a mortgage with little down and less savings. Double check if your credit score is accurate, there a many cases where your score needs to be updated or revised.
4) Understand Your Long Term Goals
It is really important that you think deeply about where you see your future life heading. Geographically, you need to commit to the area of your home for long term living. Financially, you need to determine a timeline for when you will have enough saved for a down payment. Lastly, it is important to plan for the equity you can build for your home once it is yours.