3 Ways To Save For a 20% Down Payment
Buying a home can be a daunting task. Finding the right place is just the beginning. Where are you going to come up with the money for a down payment. In reality, This should have been your first step long before you even began looking for a home. In our 24/7 instant gratification society, we often overlook this. If you have found the perfect home, and have not begun your saving for the down payment, you may want to look into VA home loans or the Department of Agriculture's rural development program.
Check with your broker or lender to see what other options may be available to you. They are, after all, the experts. It is in their best interest to find the right program to help you. If you have not found a house yet, and can practice some self control for a couple of years, You can save up enough for a substantial down payment on a mortgage. Maybe even the Full 20 percent down that most conventional mortgages require without Private Mortgage Insurance.
1. Put a Name on Your Money – Sounds silly, but it is the most basic way to save. If you don't have a budget in place for your monthly spending, you need to get one. There are many programs that you can use to make this easier. But the first step is to write down all of your income sources and then subtract out all of your bills. Do you have any money left over? You probably do. What is there that you can put into savings? Your monthly bills should stay pretty much the same month to month. Decide how much you can afford to save, and name it a "bill" That bill must be paid every month.
2. Make that money work for you – Once you have named the money, what are you going to do with it? Stuff it in a mattress? If you are putting it into a savings account that gets 1% or less per year, you might as well keep it in your mattress. You want your money to make money. You may want to talk to your banking institution about a high-yield savings account or a money market account. You could be looking at bringing in an extra 5% APY on your money. Another option would be a certificate of deposit. CD's can earn you more money, but are not as liquid, meaning your access to the cash is limited if an emergency should arise.
3. Set your Priority – How bad do you want it? What is your goal? Are you looking to buy the home in 2 years? Or ten years? With an average home price of $200,000 dollars, 20% down is $40000. If you are looking at the ten year option, you probably have time. If you are looking at the two year option, you may want to get a second job. Not a popular choice, but, how bad do you want it? Pizza delivery people can easily earn $20,000 per year. It is just a matter of setting your priority.
Check with your broker or lender to see what other options may be available to you. They are, after all, the experts. It is in their best interest to find the right program to help you. If you have not found a house yet, and can practice some self control for a couple of years, You can save up enough for a substantial down payment on a mortgage. Maybe even the Full 20 percent down that most conventional mortgages require without Private Mortgage Insurance.
1. Put a Name on Your Money – Sounds silly, but it is the most basic way to save. If you don't have a budget in place for your monthly spending, you need to get one. There are many programs that you can use to make this easier. But the first step is to write down all of your income sources and then subtract out all of your bills. Do you have any money left over? You probably do. What is there that you can put into savings? Your monthly bills should stay pretty much the same month to month. Decide how much you can afford to save, and name it a "bill" That bill must be paid every month.
2. Make that money work for you – Once you have named the money, what are you going to do with it? Stuff it in a mattress? If you are putting it into a savings account that gets 1% or less per year, you might as well keep it in your mattress. You want your money to make money. You may want to talk to your banking institution about a high-yield savings account or a money market account. You could be looking at bringing in an extra 5% APY on your money. Another option would be a certificate of deposit. CD's can earn you more money, but are not as liquid, meaning your access to the cash is limited if an emergency should arise.
3. Set your Priority – How bad do you want it? What is your goal? Are you looking to buy the home in 2 years? Or ten years? With an average home price of $200,000 dollars, 20% down is $40000. If you are looking at the ten year option, you probably have time. If you are looking at the two year option, you may want to get a second job. Not a popular choice, but, how bad do you want it? Pizza delivery people can easily earn $20,000 per year. It is just a matter of setting your priority.
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