As you embark on this new journey of purchasing a home, you will grow aware of the complexity of the home buying process and just how much is required in the preparation and planning phases. Among the top priorities in your preparation steps should be strengthening your finances. This involves the monitoring of your credit score, debt reduction, and, of course, saving up for a down payment, among other costs. It can be a daunting task to take on this responsibility alone, but with the help of an experienced mortgage professional like Rex Homes and the guide below, you’ll build the savings for your dream home in no time!
Creating a Game Plan for Saving Up for a New Home
Of course, the first step in saving up for your new home is knowing how much to save in the first place. This is not an amount that you should pull out of thin air but should be based on research related to the style and location of the home you prefer. The final amount to be saved will also depend on your income. You don’t want to spend a year or more saving for a home that you won’t be able to sustain after purchase! Take a close look at your budget and set your sights on a home that is and will be within your budget for years to come.
You can make this step of the saving process much easier on yourself by using the affordability calculators provided by most banks. All you have to do is provide your monthly income, any recurring expenses that may impact your home budget, and the desired length of your mortgage loan. The calculator will then yield an estimate of how much the mortgage will cost, along with the most likely down payment that will be expected of you. Once you have this information, you can get started on executing your savings plan.
How to Save for a Down Payment
With a clear goal now in mind, you’re ready to make some tangible progress in saving for a down payment on a brand-new home. Follow the steps below to build your savings quickly, yet comfortably and efficiently.
- Develop a regular saving schedule. Determine the regularity with which you want to put money away for your down payment. For example, you can put one hundred or so dollars away monthly, or a smaller amount, weekly. A set schedule will prevent you from forgetting and becoming inconsistent with the money you’re putting away.
- Put all windfalls toward your down payment. If you get a bonus from work, a tax refund, or any bulk payment, put it straight toward your savings – don’t give yourself a chance to spend it unnecessarily!
- Maintain an emergency fund. Don’t allow any chances of losing your down payment savings to an emergency. Simultaneously put money away for any unexpected expenses, so you don’t have to dig into your future home budget.
All the while, you should be consistently reviewing your budget to identify any areas where you can increase saving and decrease spending. A mortgage professional can assist you in monitoring your budget and much more. They will ensure that your efforts in saving for a down payment will be streamlined, allowing you the greatest ease in preparing for the home of your dreams. Get in touch with an expert mortgage professional today to start building your savings for a brand-new home.
