Tips for Saving Up Your Down Payment
For many homebuyers, coming up with the down payment on a new home is the biggest hurdle. First-time owners may especially need assistance on finding ways to save the money needed to put a down payment on a new home whether they are in West Michigan, Auburn, Alabama, or anywhere else in the country.
However, there are a lot of small adjustments you can make that will help you put away the money you need faster, and none of them are difficult. Some may take commitment and diligence, but all of these tips can work for anyone who wants to own instead of rent.
If you are considering the purchase of a new home, you will first need to have financing information to work with. You will need to know what your dream home will cost, and how much you’ll need for a down payment.
We can help you with that. To start, check out this Mortgage Calculator by clicking Here.
Then, connect with our sales team and lending partners to discuss your goals so we can help plan the steps you’ll need to take to get there. We can also help you understand the different parts of a mortgage and the total amount you’ll need for your down payment.
Most home purchases require a 20% down payment. However, there are a few ways to put less down which you can also discuss with your lending partner.
Once you have the information you need, you can start putting money aside to reach that goal. There are some simple things you can do, or change, that will have a big effect on your savings plan.
How long you’ll need to save is entirely up to you. Everyone’s situation is different, so if you already have a little money set aside and just need to add to that nest egg – you will probably be able to reach your goal quicker than if you were starting from scratch.
You may also need less time than expected if you are able to put a bigger chunk of money aside each week. No matter what your own unique savings plan takes, here are a few ways to save that might help you get to your goal faster.
Pay off credit cards and smaller debts first.
This means any credit card debt, but especially those that have a higher interest rate. every month. By paying off the higher interest rate cards, you’ll save money in the long run, free up money to use to pay other debts, and also raise your credit score.
Cut out unnecessary or unused subscriptions.
It’s easy to sign up for something and forget about it, or to subscribe to something thinking you really want or need that product or service, only to find out you never actually use it.
Take inventory of all the subscriptions or services you are paying for monthly, then cancel the stuff you don’t really need or use, or that you can live without. Drop the TV channels you don’t watch, or that you can live without.
Drop the subscriptions to things that are convenient but you don’t use enough to justify the cost. You’ll be surprised to see just how much you, like most people, spend every month without realizing it.
Eat in more often
It’s convenient to grab something from the drive-through or by running into a convenience store. However, by planning ahead you can cut those costs and put more aside for your future.
Pack a lunch to take with you to work, or wherever you normally eat. Skip the dinners out when there is plenty of food in your refrigerator back home. Stock up on lower-cost munchies (which may also be healthier) like carrots and celery and put away the money you save.
Cut back on your utility costs.
Turn down the thermostat a degree or two. Wash your clothes in cold water instead of hot. Take shorter showers. Install LED bulbs throughout your home.
It doesn’t take much to shave money off your utility costs if you are committed to it. You can do the same with your phone bill – cancel the services you don’t need, like extra data. Or, check for new mobile plans. You may find one that’s cheaper and a better fit for your use. With a lower phone bill and utility costs, you can set more money aside for your goal.
There are lots of other ways to set aside extra money, such as getting a second job or asking a family member for help. If you look around just a little, you’ll see opportunities everywhere.
Once you have some money saved, you’ll want to make sure you can’t easily spend it. You might put your money in a variety of CD’s to vary the maturity rates and protect your money from inflation. That will also make it harder to spend impulsively so you can keep on saving.
Saving money can be a challenge, but it doesn’t have to be. Reach out to our expert Eastbrook Homes team and let us help you plan for your dream home and what it will take to get there.
For a bonus section on the pro’s of owning versus renting, watch the below interview with Eastbrook Sales Agent, Kurt Suidinski and MLive Host, Eric Hultgren.
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