How to save enough money for your down payment?
Buying a house is a big step in anyone’s life. Finally becoming independent enough to have your own home. This is a very fine way of showing that you have finally become a full-fledged adult. This also means that you can start a family and live the life you and your future family deserve. This is not only a big emotional step for everyone, but it is also a big financial step. Buying new houses is at an all-time low these days. Statistics show that in the 80s the homes were much cheaper than they are today. This makes younger generations give up hope of owning a home. However, it is still possible to buy a home, if you know how to save money for your down payment.
There is one thing that makes buying a house a bit easier. This is the existence of down payment. A down payment is when you give a 20% of the total cost. After doing this you will have to pay the rest over time. Paying the rest is the easier part because you know that you will have a steady job since you are buying a new house. So, it is crucial to know how to save money for your down payment, because this is the only, and biggest part of the cost you have to pay before moving in. In this text we will talk about some of the ways you can do so.
Knowing your priorities
The most important thing to do when you save for a new home, is to know your priorities. Saving for a house is much more important than saving for, for example, a microwave or a washing machine. You should stop eating out every day, and consider buying ingredients so you can cook at home. A big solution in knowing in which areas of your life you should tighten your belt, is to start tracking your expenses. By doing this, you will be able to see where you spend more money than you should, and cut back. You are buying a house after all, so this should be your top priority.
Paying off your debts
When you have credit card debts, they will only increase if you do not pay them on time. A great idea is to start paying those debts in order to efficiently save for your down payment. There is a method called the “avalanche” method. This is when you pay off the debt with the highest interest rate, and then you move on to the second highest. This is much better than the other way around because the debts will not accumulate as fast. When you do this, you can proceed to the next step of your plan.
Cut down on rent
Cutting down on your rent is a great way to save money for your down payment. You should move to a cheaper house or apartment in order to do so. Should you decide to move to Sunny Isles Beach, if you live in Florida, for example, it will help you save money for your down payment. If you live in a place where your monthly rent is $1500, consider moving to a place where the rent is around $1000. This will save you $12000 over a year. This is not bad considering the constantly rising prices of houses.
Selling stuff you do not need
This is a way of getting rid of old stuff that you do not need, and, at the same time, earn money for your down payment. See if you have some kitchen appliances or some power tools in your garage that you are not using anymore. You can sell them online or even put up a garage sale. A garage sale is one of the best methods of freeing up cluttered space and earning money in the process. By organizing a garage sale you may remember that you have something hidden in your attic that you had completely forgotten about. Take a good look, it will not hurt, and it can prove worthy your time. Should you sell something online, you will need to pack it well before sending. Affordable packing supplies won’t affect your budget if you are careful where you acquire them. Your items deserve care, so pack them well!
Looking for first-timers plans
There are some companies that offer lower costs for mortgages and also down payments. If you say that you are buying your first house, they will try to find you a house with a lower down payment, down to 3.5%. This will make you pay off the mortgage for a longer period of time, but you will get to live in a house for a small down payment.
Getting a second job
By getting a second job, you will ensure that you earn almost double the money you are earning now. If you are mentally and physically capable of doing so, then go for it. There are people who are able to do three jobs a day to support themselves and their family. When you have a second job and saving the money properly, you will surely have enough for a down payment, if you combine it with the previous advice.
Asking your friends or family for a loan is a way of getting money for your down payment
This is not a very pleasant way to save money for your down payment, but nevertheless, it is efficient. Ask your family or friends for a gift or a loan and make sure you will be able to pay them back. If you do not, you probably won’t get any more help of that type.
Buying a house will be a new step in your life, so make sure you do it right. By following these steps, you will surely make enough money for your down payment, so your new life of opportunity can begin.