When you hear the phrase “Buy a new home,” what’s the first thing that pops into your head? Perhaps it’s exploring charming neighborhoods or browsing through captivating listings online. Maybe you even imagine the colors and décor for your dreamy new home. If you’re serious about making that dream a reality, a fantastic starting point is to take a look at your financial situation, especially when it comes to saving for a down payment.
While it’s true that the days of 100% financing with zero down payment are behind us, don’t let that dampen your spirits! Financial institutions might require a certain amount upfront, but with a little planning and dedication, you can achieve your home ownership goals. No need to be sitting on a mountain of cash.
Here are some helpful strategies to boost your savings and bring you one step closer to opening the door to your new home:
- Start Saving Early – Purchasing a house doesn’t happen overnight, and neither does saving up for one. The more time you give yourself between the day you start to save, and the day you walk into an office for closing, the easier it’ll be to meet your goals. Instead of simply stashing your cash in a cookie jar, consider investing that money in a CD, or other high performing investments. With terms ranging from a few months to a few years, you can earn interest on the money you have saved. Working with a financial planner is a great way to help keep you on track.
- Save wherever you can – There’s no need to cut out all of your luxuries, but small savings throughout your life can add up. Canceling unused subscriptions, shopping for sales and deals, and saving raises or your tax refund are just a few ways to help set aside for that down payment.
- Assess Your Current Assets – The first step is to determine what cash or other liquid assets you might already have available. You won’t want to completely drain your savings account, so look for other places where you might have some value stashed away, such as a pet project like a car, boat, or motorcycle that you haven’t even been using… which could be sold for additional cash.
- Explore Loan Options – Not all loans are going to require the typical 20% down payment. The easiest way to make money is to save money, so finding a loan which could offer you a lower down payment means you’ll need to save less in the first place. Check out FHA and VA Loans.
- Don’t be Afraid to Ask for Help – Some buyers are hesitant to seek assistance, but a helping hand could be a deciding factor in helping you get those final few dollars needed. Some lenders offer gift funds, where your family, a business partner, or employer can help you pay. Also consider local and state programs which may offer down payment assistance.
- Seek Employment Incentives – While you probably don’t want to change careers simply to get a head start on homeownership, you may already be working in a career path that regularly offers assistance. This is typically true for teachers, military, and first responders, but may also apply to other government employees. Speak with your lender and explore your options.
Buying a new home is a great way to add to your financial security, allowing you to build wealth while also having a great place to call home. While you should never “put it all on the line” just to make the purchase, you shouldn’t need to with these tips. Start saving early and save smart: finding that down payment might take a little time, but it might be easier than you think. If you are ready to explore your future as a proud homeowner, get in touch with us to discuss your options and what might work best for you.
