Does the prospect of a big down payment make home ownership seem impossible? It’s not as out of reach as you might think. Here are five tips to help you climb the down payment mountain.
Every month you pay the rent, you’re probably thinking, “I wish this money was going into my future.” For a lot of would-be first-time home buyers, it’s the down payment which makes home ownership seem impossible. Climbing the “down payment mountain” isn’t impossible. Like any major challenge, it’s all a matter of breaking your big, hairy, audacious goal down into practical steps.
Here are some tips to conquer saving for a down payment:
Find out where your money goes. You can’t start saving if you don’t know where you’re spending. For a month or two, track each expenditure, no matter how small. Get an objective picture of where you’re spending the cash.
Get specific about how much you need to save. Even if you’re not 100% sure what your down payment needs to be yet, it’s good to start doing a little math to figure out how much you need to save. Pick a dollar amount and a timeline to hit that dollar amount. For example, a $25,000 down payment in two years comes to $1,041/month. Sound unrealistic? Either scale down your home desires to something smaller or scale up your timeline. If you can wait three years, that monthly savings goal drops to $694/month.
Determine the big moves you can make. If you’re in a three bedroom apartment and can stomach the idea of scaling down to a one bedroom, how much would you save in rent? What about going from two cars down to one? If you can make it work, these sacrifices will have a huge impact on your savings goals.
Setup a separate savings account. Don’t let your dream home money mingle with your regular checking or savings account. Establish a high-yield savings
If you are considering a home purchase, give us a call, text or email. We would love to have the opportunity to help you find your new home.
-Steve and Sandra
Steve Hill and Sandra Brenner
Windermere Real Estate