Now that you’ve finally decided to buy your first home your excitement level is through the roof. You picture what you would do with each of the rooms, the landscaping, and that you won’t have to worry about walking heavily on your upstairs apartment floors. Or, you’re finally getting out of your parents’ house. However, you need down payment strategies for the first time home buyer.
Down Payment Strategies For The First Time Buyer
Certain actions make buying a house easier. Of course, a high credit score helps immensely. And, a good-sized down payment not only makes it easier, but it also lowers your monthly payments. And that allows you some extra cash to spend on new things for the house and the yard.
However, you have enough to pay all of the costs of home ownership, but you don’t have much, if anything for down payment. That’s easy enough to rectify, if you really put your mind to it. Or, you could always take advantage of several of the programs available to first-time home buyers. Many types of mortgages are also available to help you out, including VA mortgages, FHA loans and more.
Open a New Savings Account
Keep your down payment savings in a separate account that is difficult to access. If you have to go to the bank to take money out, you’ll be less likely to cave in and spend it on a vacation you want to take, or that night out with friends where you decide to foot the bill. If you have the account at the same bank you have your checking account, you’ll be able to easily transfer funds from your checking to the savings account.
Saving More Money
Take stock of your budget. Or create on, if you don’t have one. This will help you see where you might be able to save some extra money each month. Add up your monthly income, and then subtract taxes and other payroll deductions. Next, subtract any bills you have, such as utilities, car payments, insurance payments, loans and credit card payments.
Start saving all of your receipts. Average grocery receipts out for the month to get the amount you normally spend on food. Spend that amount or less each month. If you get a Starbucks every day, start going without. Add it up for the month, and then deposit that money into a separate savings account. If you spend $5 per day at Starbucks, you’ll have $150 every 30 days toward a down payment. Look at other bills where you might save money. Do you need all of those channels on cable television? Is it possible to decrease the minutes you pay for on the cell phone? Since you are used to spending this money, once you make the changes, deposit the difference into that special savings account.
Credit Interest Rates
Check your credit card interest rates. Transfer the balances to a card with a lower rate or call the company to ask for a lower rate if you make payments on time. Some credit card companies will give you a lower interest rate if you pay on time.
Down Payment Assistance Programs
Check with your lender to see if they offer first-time buyers’ down payment assistance programs. You may be able to find some extra help with one of these programs. Be sure to ask how long you need to own the home in order to keep that money.
Gifts and Other Sources of Money
While the money you use for a down payment must be yours to keep, you may also use gifts from relatives or even your tax return. When you get a check for your birthday, your wedding, anniversary or other special occasion, deposit that check into your new savings account. You’ll be surprised at how quickly you’ll be able to save up a sizable down payment.
Visit On Point Carolinas Realty
When you are ready to purchase your first home, contact us at On Point Carolinas Realty. An agent will search for homes that meet your criteria so that you may look at several. And remember, the larger the down payment you have, the more house you’ll be able to afford.