When it comes to purchasing a new home, you’re going to need down payment money. Depending on your situation and what type of loan you qualify for, you may be able to get away with a down payment in the single digit percentile. Others, however, may need to save closer to 20 percent. Here are some great tips to help you on your journey to save some green.
The first step you want to take is to open a separate savings account for your down payment. It’s very easy to spend money intended for a down payment if it’s currently in your checking account. It’s best to keep your down payment money separate from your other accounts. Opt for a savings account that doesn’t allow any sort of debit card access. This will help to minimize your ability to easily spend the money on other things.
Next, you want to pick a percentage of your income to devote to your down payment fund. This may seem like a fairly simple concept, but so many people don’t do it. Many believe that it won’t make a big difference in their savings. The reality is that sending a couple hundred bucks to your down payment savings account once a month could lead to $2400 by the end of the year. That’s a good start for your down payment savings. Pick a percentage that will fit in your budget and devote yourself to automatically transferring that amount into your down payment account for every source of income you get. Whether it’s your regular paycheck or your annual bonus, the same percentage of each income source gets transferred into your down payment account.
Another great tip is to use round-up applications. You can easily link your debit or credit cards to these mobile applications. Each time you make a purchase with your card, the application will round your purchase up to the nearest dollar. It will take the remaining cents and put that into your down payment account. For example, if you purchase a coffee for $2.50, the application will round your purchase up to $3.00. It will take the $.50 and deposit it into your down payment account.
If you’re currently living in a home, it’s likely that you will have some built-in equity that you can use for your down payment. You should look for ‘ ways to sell my house fast ‘ online. This can get your home sold and allow you access to the built-in equity that you currently have in your home. The quicker you get this money, the quicker you can purchase your new home.
Saving money for a down payment can be a tough project to get started with. While that staggering amount of money that is required for your new mortgage can be daunting, it can be done with the right plan. We encourage you to use the tips we provided for you above to start your journey on saving a down payment for your new dream home.