How to Save for a Downpayment

With interest rates down and inventory tight, many savvy consumers are taking a good, long look at investing in a home of their own. The benefits are big and the rewards of buying a home long-reaching. For some consumers – a down payment is the only thing standing between them and the dream of home ownership. Here are some simple things you can put into your personal or family action plan for saving that down
payment money in less time.

1. Get in the know. Like any good budget or savings plan, the first place to start is to determine where you are NOW in relation to your credit score, your monthly bills and assets. Contact me or a trusted mortgage professional to see how much home you qualify for and how much you’ll need to save to
purchase your home. We can help you take a look at things like credit scores, loan requirements and interest rates now so you can be simultaneously doing ALL the things right during this savings period to ensure the most favorable rate and terms.

2. Create a “Down Payment” account. Ever see those little ceramic pots with “House Fund” or “Vacation Fund” on them – or the piggy banks with the “do not open ‘till holiday shopping time” labels? By opening a savings account just for your future home purchase, you help lessen the likelihood of tapping into that money for other things. Check with your bank, or local credit unions to see if they offer any special interest rates or programs for first time home owners looking to buy.

3. Take a good, long look at your monthly bills. Do you have credit cards or revolving credit with high interest rates and high monthly payments? That’s doing two things to hurt your cause. First – those interest rates are costing you big and just money out the door. Secondly, those high payments are bad
news for your debt-to-income ratio. You may have to tackle those bills first and get them behind you. Make a list of your creditors, how much you owe, the interest rate and the monthly payments. Take the highest interest rate one first, get it paid off and then work on the next one, etc. (Plus it feels REALLY
good to pay those guys OFF!)

4. Automate your savings. Out of sight, out of spending reach. Once you’ve figured out how much you can sock away every month, have that amount automatically withdrawn from your account and put into savings before you even see your paycheck! (Most employers can do this in a simple step if you are
direct-depositing.)

5. Every little bit counts. This is the fun part. Get a money container for your house. You can make it as decorative or as plain as you like. From a beautiful glass jar (where you can see your results) to a coffee can (where you can hide your treasure) – and make a pact with yourself, your spouse or significant other and even your kids. Each week put whatever you can in the jar towards your house fund. From leftover
change from the store, to the couple of dollars here – into the jar it goes. In fact, whatever you’d NORMALLY spend – save instead! It’s amazing how fast it can add up when you make it a contest or a fun thing for the whole family! Saving for a home of your own can be challenging, but it can be exciting too. The feeling of reward and accomplishment is extraordinary.

Start with these five steps and very soon you too can enjoy the long-term benefits of setting down roots and investing in your future. Know that I’m always here to help. As a Real Estate Professional, I can help you customize a savings plan all your own so that you can be sure your family is heading in the right direction every step of the way! Call me today.