Having a substantial down payment to put towards your home purchase can ease some of the home buying pressure. Not only will it help you secure a mortgage, but it will also open up the price range for your new home.
Many people save for their down payment for several years. Over time, you can save smaller amounts that won’t impact your lifestyle. There are some faster ways to save for your dream house, but it will require some sacrifice.
Here are some ways to make sure you have plenty of money when it comes time to buy.
Ballpark How Much You’ll Need to Save
The first thing you need to do is figure out how much you’ll need to save and what your timeline is. Schedule a meeting with a mortgage lender who can help you determine how much of a mortgage you can qualify for. On average, your housing expenses should not exceed 28% of your monthly income. Keep this in mind when putting together a savings plan.
Set up Automatic Transfers into a Savings Account
Keeping your monthly savings simple and convenient is key for long-term success. Set up an automatic monthly deposit into a savings account (away from your checking account). Make a promise to never use this savings for anything other than a down payment.
Lower Your Expenses
Review your monthly expenses and look for items you can reduce or eliminate completely. Take the money you would be using to pay for these unnecessary items and put it in your house savings account. Remember, that this is only a short-term lifestyle change- you don’t need to live bare bones forever.
Reduce Your Debt
Getting your debt paid off and/or high-interest rate debt lowered can help you save a substantial amount. For instance, if you have more than one credit card, pay off the highest interest card first, then proceed to pay off the remainders. The less debt you have, the more money you will have for a mortgage payment.
Get a Second Job or Start a Side Hustle
Even if this is only a temporary job, money from a second source can help you make larger and faster contributions to your house savings account.
Bank Unexpected Windfalls
Get a bonus at your job or large tax return? SAVE IT. By depositing these extra windfalls, you will fast-forward the process and get you to your goal quicker.
Saving a large sum of money comes with a lot of sacrifices and delayed gratification. Once you’re in your dream home, you’ll be happy with your decision to buy responsibly.
About Asheville Realty Group
Asheville Realty Group is located in the heart of Downtown Asheville, surrounded by the Blue Ridge Mountains. We are your local Asheville connection servicing the towns of Arden, Asheville, Black Mountain, Candler, Fairview, Leicester, Mars Hill, Hendersonville, Fletcher, and Weaverville to just name a few. As an independent group, our brokers combine their experience from successfully closing hundreds of transactions every year. Asheville Realty Group specializes in out of town customers, looking to relocate to Asheville, NC.
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