How to Save for a Down Payment
Buying a home with no down payment or very little down.
First time home buyers may feel as if they are climbing a mountain trying to save for a down payment to purchase a house. Many buyers believe they need 20% down payment. We have several government loans with very little money down…..Here’s three programs that may brighten your day. Good news here too…you can ask the seller to pay for part or all of your closing costs.
1st program: USDA 100% financing home loan which enable you to buy a home in rural county’s with no down payment, you just have to pay closing costs. 2nd program: VA home loans. Which is 100% financing again the seller can pay closing costs. Veterans can purchase a home anywhere in the country as long as the home passes VA standards. 3rd program and most used FHA which is only 3.5% down payment. So if you are trying to buy a house with a sale price of $200,000 dollars your down payment is $7,000. If you have to pay your own closing costs how much money would you need totally? Around 5% or $10,000. Now FHA also allows you to receive a gift from a relative for part or all the money you need.
Do you need help with your savings efforts? Try these tips:
·Create (and stick to) a budget. A reasonable budget can help you minimize your spending and maximize your savings. Make sure to write down every expense you have, no matter how small.
·Automate your savings. You could have a portion of your paycheck deposited right into your savings account or schedule regular transfers from checking to savings once or twice a month. You can also use apps that round off all your purchases to the nearest dollar and deposit the difference into savings.
·Pick up a side hustle. Consider picking up a flexible side gig, like ridesharing or food delivery. Commit to putting all of your earnings from that gig in a savings account where the money can earn interest.
·Cut out the extras. Are there any corners you can cut in the short term? Think about canceling streaming services you don’t use that often or cooking at home instead of ordering takeout. Then, take those savings and put them right toward your goal.
·Pare down and declutter. Do a little house cleaning, and consider selling items you no longer use or need. You could host a garage sale or sell things online, then put your earnings toward a down payment.
Saving up for a house isn’t as difficult as it might seem when you plan ahead. Make being a homeowner your main priority!
If you need more help with your home financing goals, get in touch today.