A down payment is crucial if you want to buy a home — so follow these tips to save one.
- You’ll typically need to put at least some money down when purchasing a property, but it can be hard to save up a down payment
- Some techniques can help, such as practicing your prospective mortgage payment and reducing your current housing costs so you can save more.
If you’re hoping to buy a home in 2023 or soon after, you’ll need to get to work on saving up a down payment if you haven’t already done so.
Most mortgage lenders do require at least a small down payment, and a larger one of 20% of your home’s value is best if you can make it happen in order to avoid added costs and a higher interest rate.
Saving up a ton of money to put down on a house is no easy task, but these four techniques can help you to make it happen ASAP.
If you want to save a down payment as quickly as possible, finding a way to bring more money home is the fastest way to do it. That’s because you probably already have a lot of your current income committed to other things — but anything extra you earn can go right in the bank toward your home purchase.
There are lots of ways to bring in extra money. You can:
The more techniques you try, the faster you can save up the money needed to move forward with becoming a homeowner. Remember, it’s only for a short-time, so it may be worth doing that extra work.
More: Our picks for best FHA mortgage lenders
2. Practice making your mortgage payment
If your mortgage payment (and other housing costs) are going to go up after you move, you can save some extra money by “practicing” for your higher payment.
For example, say you’re paying $1,000 a month in rent and will pay $1,200 after moving to a new home. Since your housing costs will be $200 higher, get used to making the extra payment now by transferring an extra $200 a month into your down payment account when you pay the rent.
Not only will this test run help you grow your account balance for your down payment, but it will also help you decide …….