For the past month, the real estate market has been in one of its best conditions in recent memory for first-time home buyers, with low mortgage rates becoming the norm and the FHA announcing that it will lower its annual premiums to bring more buyers into the market. If you're one of those buyers who is thinking about taking the plunge and moving from renting to home ownership, you're probably the most concerned about one number: the down payment. An FHA loan can give you one of the lowest down payments on the market, but you'll still need to save a substantial chunk of money. Here are some tips to help you get there fast:
- Reduce your monthly expenses. For most people, rent is their single largest expense. Therefore, the easiest way to slash your expenses each month is to find a way of lowering your rent. Bringing in a roommate is a good option, as is moving to a cheaper location.
- Make automatic savings contributions. If you automate the deposit of a certain amount of money per month with your payroll department, you'll be able to save automatically, without the temptation to let your account run out at the end of the month.
- Use public transportation. A car payment is a significant expense each month, and in most large cities it's possible to get around by public transportation for much cheaper. If you need a car to get to work, consider downsizing to a smaller model that uses less gas.
- Set up a gift account. As people often buy a house after other significant events, like a wedding or a birth, don't be embarrassed to ask for the help of friends and family members during those times -- 27 percent of buyers in 2013 used gift funds as a part of their down payments.
For information about the mortgage products we offer, contact New Penn Financial today.
Sources:
http://www.washingtonpost.com/news/get-there/wp/2014/09/09/how-to-save-for-a-down-payment/
http://www.zillow.com/blog/strategies-saving-for-down-payment-168290/
For more information, contact Ryan Hatleli (Branch Manager NMLS#174748) at New Penn Financial; (605) 877-3485; rhatleli@newpennfinancial.com; http://www.newpennfinancial.com/rhatltli
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