Thursday, August 20, 2015 / by Matt Chase
When looking to buy a home one should have a significant amount saved towards the down payment of this large purchase. Generally, experts suggest having at least twenty percent saved towards the total amount of the home as your down payment. Today I will be discussing some simple ways and tips for saving toward a down payment.
One suggestion is to go where rent is cheaper. If you can move to a smaller apartment, or rent in a different area, this could potentially save you a few hundred dollars a month. Consider going to a place where your rent is less than what it is now. Put that extra money you are saving directly into a savings account geared toward saving for a down payment. Some people may be lucky enough to be in the position to move in with family or friends for a cheap price, or even for free. If you can, take advantage of this opportunity to save toward your own place.
Something that might be overlooked when trying to save is to consider less house. Do you really need 3000 square feet, or would you be happy with 1500? Generally you probably don’t need as much house as you think you do. This change in square footage of house could potentially be a huge difference when you’re talking about how much you need for a down payment.
Consider sitting down and looking at your budget very objectively. Do you really need that fancy gym membership? Could you go to a community center for cheaper? Or even do your workouts at home or at a nearby park? Cut down spending where you can. Limit going out to dinner for special occasions, pack your lunch for work, and make most of your food at home. For some people getting that afternoon coffee isn’t a big deal, but when you can home brew your coffee and see how much you are saving, then it is an easy switch! Also, consider swapping out your cable for Netflix or Hulu.
If you are very motivated, pick up an extra part time job one day a week. Set aside that money into the down payment savings account. You’d be surprised how quickly this can add up, and add a few hundred dollars into your savings account. I mention savings account a few times in this article. Be sure your money is working for you, not against you. If you know it is going to be a year or two until you have enough money, consider getting a high yield savings account. Shop around for a great interest rate.
Applying a few of these tips to your daily life, and budget, can significantly help you plan for the down payment for a wonderful home.If you or someone you know is interested in selling a home, specifically in the Lorain or Cuyahoga counties, feel free to contact us at Chase Group - Keller Williams Realty, Greater Cleveland West online here or at 440-452-2000.