As rent prices continue to increase, the pressure to purchase your home can be real! You don’t necessarily need that to make a 20% down payment to purchase a home but starting to save for a 10% down payment should be your goal. How should you know how much to save? Start by plugging some numbers into an affordability calculator and set an appointment with a lender to discuss what types of financing you may qualify for. Next comes the saving...you may be thinking how can I save for a big down payment while still renting? These six tips will help you start the journey towards home ownership!
Take Advantage of Windfalls
You have another source of savings with windfalls - those unexpected events that bring in extra money into your family. When you receive a tax refund or a bonus at work, resist the temptation to splurge a little and set those funds aside for your home.
Set a Budget
While this might be the most obvious, paying attention to your spending can make a huge difference! Use a spreadsheet to track your net income and monthly costs like rent, car payments, student loans, and bills. Once you see how much money is left each month, determine how you spend it. Then ask yourself the question, where can costs be cut?
Once you set your budget and start cutting costs, you can allocate a certain percentage or specific dollar amount of your paycheck to go directly into a savings account. This is one of the most popular and convenient ways to save because automating this process essentially makes it invisible!
Keep the Change
Many banks allow you to sign up for cards that rounds your purchases up to the nearest dollar and put them into a savings account. Apps like Acorn allow you to do the same.
Save the Payments
Already paid off your student loans or your car? Put that amount you were using to pay off your loans towards your new home.
The Williamson Group has a great track record of helping first-time homebuyers and would love the opportunity to work together. Send us an email at Schuyler@wgrouprealestate.com or give us a call at 512-437-1059 anytime.