5 Ways to Save for a Down Payment
This is one of the most difficult tasks, especially for young adults. Many of us are working paycheck to paycheck with little room to save for anything. So how will we ever buy a home or come close to a down payment? There are ways, it might not be what you want to hear, but it can be done. This is going to take a lot of hard work, dedication, and unwavering commitment. There are definitely more than 5 ways to save but here are some of the top 5 ways to get that down payment ready.
Set Aside Just a Little
Set aside a specific amount in a savings account every month. You might think there is no way because you are living paycheck to paycheck but you would be surprised that there may be room in your budget to cut something out. It is as simple as eating out less or avoiding Starbucks every day. You can set aside $25-$100 a month and watch it grow over time. This isn't a quick results savings but it does work if you have the patience to stick to it.
Skip the Unnecessary
Skip any unnecessary vacations for the next year. This money you would have spent traveling will contribute to your down payment savings. This can be something as small as a weekend downtown with your friends or a night or two out on the town. These types of “vacation” like activities or celebratory weekends can add up quickly and prevent you from your ultimate goal.
Lower Expenses Where You Can
Lower your expenses by reviewing what you can eliminate from your budget or at least reduce. Subscriptions can be the worst money sucker of them all. You might be surprised at how many subscriptions are coming out of your bank account each month if you are not paying attention.
Debt Reduction Snowball
Reduce your high-interest debt because high interest can be a reason you are not able to save as much as you can. Pay off the high-interest credit cards and when you pay the entire balance close the card. You want to get rid of all high-interest debt.
Borrow from family! A lot of times parents or relatives want to see you succeed and help with your first home. You can receive monetary gifts up to a certain amount, depending on where you live and the tax laws. You can include this amount on your loan application. If you actually DO borrow though with the expectation of paying it back, it could alter your debt to income ratio and have adverse effects.
Ready to apply? Speak to our lender today about how close you might be to loan approval or set up a game plan and direction so you can be ready to buy in the Southern Maryland real estate market in the next 6, 12, or 18 months!