Kay, 404-298-5500, Georgia Mortgage Consultant
Most mortgages today require a 3% to 5% down payment. Even if you qualify for a no-down payment mortgage, saving before you buy a home is a smart financial strategy.
Having a healthy savings account demonstrates financial maturity, and makes it easier for your mortgage to be approved. In addition, there are unforeseen costs associated with owning a home. Having a savings account cushions your transition from renter to home owner.
Accumulating savings doesn't have to be a difficult process. It is possible to make the easy, small changes that lead to big savings. Here are a few ideas.
- Curb impulse spending by leaving your credit (and debit) cards at home.
- Bag your lunch.
- Clip coupons to cut your grocery bill.
- Keep the change.
- Put your savings on auto-pilot.
- Check out what you can pick up for fr-ee.
- Try the envelope method.
- Rent a room or become a lodger.
- Sell your excess stuff .
Studies show that those with credit cards are likely to spend 18-25% more. Having to take a trip home to pick up your credit card may just give you the time you need to change your mind.
In an era where even fast food lunches cost $7, eating out can easily add up to $200 per month. Instead of going to lunch with the group every day, try giving yourself a treat once a week instead.
Some supermarket chains will double or even triple the face value of coupons. To receive special coupons for your family's most popular grocery items, register on the manufacturer's site. Manufacturers will often send special offers or coupons via email.
Here are some websites you can use to check grocery sales and specials in your local area. (Some of these websites require registration).
MyGroceryDeals
Coupon Mom
Shop Local
How easy is this one? At the end of each day, put your spare change away and watch it accumulate to real money. What you call "spare change" depends on your income. Some people save anything less than a dollar, while others save anything that is less than 5 dollars.
So, now that you are saving all of this money, how do you make sure it stays in a savings account? Set up an automatic withdrawal with a federally insured savings account or aFDIC-insured money market deposit account .
The Freecycle Network™ is an online community that is fr-ee and open to the public. Members from your local area will post items they are willing to give away. You can get everything from office supplies to electronic equipment to compost from this website.
With the envelope method, you create an envelope for each spending item (example, gas, food, etc.). Each pay period, you put the money you've allotted for an item in its envelope. Once the envelope is empty, that's it -- no more spending.
If you decide to become a lodger as a way to save on housing expenses, make sure you have a contract, and that all payments are made with a check. Once you decide to buy a home, your mortgage company will want to see copies of cancelled checks proving your rental payments. If you decide to rent a room in your home, it is critical that you conduct background and credit checks on your boarder and have a contract.
If you are like most Americans, you have accumulated a lot of stuff you are not using. Have a neighborhood yard sale. Put items you don't need on eBay or craigslist and deposit what you earn in your savings account.
Follow these simple steps and watch your savings accumulate.
For information about applying for a Georgia mortgage loan, feel free to email (anointedmi AT aol DOT com) or call me (404-298-5500).
Posted by Kay, Georgia Mortgage Consultant and VA Loan Specialist.
404.298.5500
25+ years' banking and finance experience.
Helping residents of Dekalb County, and all of Georgia with their mortgage financing needs since 1998.
Specialties: VA Mortgages, GA Relocation Mortgages.
Not meant to be tax, financial or legal advice. Please consult a professional for information about your specific situation.
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