Buying your first home can be an exciting, but busy process. Aside from dealing with realtors, understanding the lingo, and trying not to get too emotionally attached to a property before your offer is accepted, you should make sure your finances are together.
Two of the most important things to consider before you even start looking include:
- How much you are looking to finance
- And how much you will put down as a down payment
When it comes to the down payment, more is always better. If you’re looking to avoid private mortgage insurance, you should consider putting at least 20% down.
Depending on your price range, your ideal home may require anywhere from a $20,000- $40,000+ down payment. How can you come up with that type of money without waiting several years? Here are 5 things you can do to save more money to buy your first home.
Get A Second Job
This is one of the most common ways to increase your income. If you’re already working full-time and saving, see if you can get a second job somewhere or start a side hustle to bring in more income.
If you are thinking of purchasing a home with a spouse or partner, see if both of you can work extra jobs or side hustle as long as you are up for it. While you may not be able to keep that up for long, the more streams of income you have coming in, the better.
Cut A Major Expense
Another way to put more money toward saving for a home without having to put in a ton of extra work is to cut a major expense out of your budget.
You can do this temporarily or permanently. If there is something that you’re spending money on that you know you could do without, consider letting it go and delaying your gratification for the sake of owning a home.
Look into Home Buyer’s Assistance
There are quite a few home buyer’s assistance programs available all over the country to help first time home buyers. These programs are not loans, meaning the recipients don’t have to pay the funds back.
They are often funded by the by the government and vary state-to-state, but some offer grants that can help go toward your down payment and others provide funds to help you cover closing costs or both. There is usually income limitations to qualify for these programs and eligibility also depends on your family’s household size.
The government understands that there are a lot of hard working Americans out there who dream of homeownership, but need a little help getting there. In my home state, there is a program that helps provide 3% down payment assistance, and a household of three with an income of less than $90,000 annually usually qualifies.
Withhold More from Your Paycheck
If you want to save more, but you’re having a hard time being disciplined, see if you can ask your employer to withhold more income from your paycheck. That way you will prioritize saving for a home.
Use Gift Money Wisely
If you receive gift money for birthdays, holidays, or special events, try to throw that money directly into your house down payment savings account. While gift money is not always a guarantee, it can help speed up your goal and you can even mention to your family that any monetary gifts they supply you with will go straight to saving for a home. This may motivate friends and family who can’t help as much in a traditional sense still support your dream of homeownership.In addition to gifts, you can also stash away bonuses from your job to increase your savings amount.When it comes to saving for a home down payment, try not to get too overwhelmed with your goal. Lower your expenses, seek out extra streams of income and look out for any and every way to save extra money that comes your way.
The whole home buying process can definitely be confusing so we are here to help! Here at S&D Real Estate Services our agents know exactly