One of the biggest obstacles that Buyers face when purchasing a Thomasville home is the down payment. Many lenders (but not all) require around 10% of the purchase price as a down. If you are looking at a $200,000 home, you may wonder how to save for a down payment and closing costs. If you spread that out over two years, you need to put away around $900 a month. Does this sound impossible? It might be easier than you think. Here are a few suggestions.
How to Save for a Down Payment
Downsize - Moving is a way to save for a down payment? Yes. You need to think long term. If transitioning from renter to owner is your goal in the next two years, you might need to move. Renting a three bedroom home for just you and your significant other? Rent a one-bedroom apartment on the outskirts of town. Then, take the money you save on rent and put it into your savings account instead.
Trim Your Expenses - Another way how to save for a down payment is to take a hard look at your monthly expenses. Trim wherever possible. The cable and internet bills are a great place to start. Many utilities offer deals when you bundle your phone, cable and internet together. You might want to cut cable down to the absolute minimum for your local channels and go with an online service such as Netflix, Hulu or Amazon for past seasons of your favorite shows, movies and original series. Cook dinner at home six days a week. Take leftovers for lunch the next day. Forgo the gym membership for running, hiking, walking or other free activities. Talk to your cell phone company to see where you can cut down your monthly bill.
Take on a Second Job - That may sound a little daunting, but most people have down time somewhere in their schedule. Look for jobs with hours that will fit within the time off of your current full-time job, such as a barista. Consider babysitting, dog-walking or pet-sitting services for your friends and family. Are you a fitness fanatic? Ask your gym if you can teach a few classes a week. You may even get your gym membership comped as a perk. All money earned from these extra jobs needs to be deposited directly into your savings account. You'll be surprised how quickly the money stacks up!
Squirrel Away Bonuses - Does your company offer quarterly or annual bonuses? Did you get a refund from the IRS? Did you get money for your birthday? A final "how to save money for a down payment" tip is that all of these should be deposited into your savings account. Then, don't touch it!
Are you still unsure how to save for a down payment? The ideas above should help you out quite a bit. Consider utilizing a down payment calculator like this one. You simply plug in the price of the home, the location of the property and your credit ranking. It then calculates your down payment, mortgage payment and closing costs for three different loan types: FHA, conforming and 20% down.
Are you interested in purchasing a Thomasville home soon? What creative ways have you found to save money for your down payment? Please share your ideas in the comments below.
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Originally posted on my Thomasville real estate blog here: http://keysouth.com/how-to-save-for-a-down-payment/.