The first thing you’ll learn when you start thinking about buying your first home is that you’ll need a down payment saved up if you want to qualify for a mortgage. Conventional wisdom suggests that you’ll need to save at least 20 percent of the home’s purchase price to qualify for financing from a traditional mortgage lender. So, how can you get started saving tens of thousands of dollars as quickly as possible? Here are a few proven strategies to help you put money aside quickly.
Automate Your Savings
The easiest way to set money aside is to open a dedicated savings account specifically for your down payment. Once you have the account open, set up an automatic transfer from your personal checking account to the savings account. You can program the transfer to coincide with your paychecks, so you won’t have to worry about accidentally overdrawing your checking account.
Look Into Down Payment Assistance Programs
Every state has down payment assistance programs in place to help take the financial strain of saving up out of the equation. Look into the programs available in your area and see if you can qualify for those programs. If you do, you can combine your savings with low-interest loans or grants to help you come up with the money you need to make buying your first home possible.
Find Ways to Cut Your Expenses
The more you can cut your monthly expenses, the more money you can save toward a down payment. Start going through your monthly expenses and see if there are places that you can cut back. For example, if you’re paying for subscriptions that you don’t need, get rid of them and add the money you were spending to your savings account. Those simple cutbacks will make a huge difference in the amount of money you’re able to set aside.
Don’t Let a Lack of Down Payment Keep You from Shopping
Buying your first home is both exciting and overwhelming. Though a down payment can help you get a great loan with a low interest rate, it won’t be the end of the world if you don’t have the full 20 percent saved up. The best thing you can do is speak with a mortgage broker and discuss your options. If you’re ready to start finding the right loan for your financial situation, contact our team and let us help you get into your first home quickly.