A down payment is an important component of taking a step towards homeownership. It is also the biggest obstacle for buyers, especially first-time buyers.
A down payment is the cash paid upfront when making a large purchase. Then, the mortgage lender provides the remainder needed to purchase the home and the buyer(s) pay the lender back over a period of time. There are few exceptions to lenders requiring a down payment, but the amount depends on the type of loan that is selected.
When saving for a home purchase, a good first step is to open a savings account where money will be deposited regularly towards this goal. Next take a look at income versus spending and create a budget that includes the money to be set aside into that savings account. A lot of professionals recommend following the 50/30/20 rule. This means that 50% of income goes toward essentials, such as rent; 30% goes toward lifestyle-related expenses, such as entertainment or restaurants; the other 20% should either go toward the savings account or paying off debt.
Eliminate any unnecessary subscription fees; look for lower rates on credit cards and any specials such as 0% interest for a period of time; look for any kind of discounts on car insurance or cell phone promotions; use coupons where possible and always look for restaurant or grocery store specials. There are a lot of opportunities to save, but it takes time and effort to look or ask for them.
Once a budget is in order, there are many ways to add some part-time income and so much available to do from home. Any kind of secondary income will make that homeownership goal much easier and quicker to reach.
Let us know at Whippet Properties of Florida how we can guide or assist you in saving for that dream home. “If you can dream it, you can do it!”