How Should You Save for a House Down Payment?
Let’s face it: no one wants to worry about saving money. If you’re making enough money to pay all your bills and get dinner out a few times a month, what’s the worry, right?
Well, for some people, this lifestyle might work out just fine. But for others, savings need to be set aside for purchasing a house in the future. In this guide, we’ll provide some tips for how to effectively save for a house down payment. Also, if you are unsure of how to go about this process on your own, helpful mortgage professionals are an excellent resource to utilize. One group of these professionals, Rex Homes, has provided additional helpful information on their blog here: https://blog.rexhomes.com/down-payment-savings-guide/
What’s the Typical Amount Homebuyers Need for a Down Payment?
It’s difficult to state an average amount in terms of dollars and cents. Home prices vary widely, and homebuyers should always look to purchase a house within their means. However, lenders will generally prefer that you put down at least 20% of the value of the home in down payment.
What are Some Specific Tips to Help Me Save for a House Down Payment?
- Save Over the Long Term. It’s important to be realistic in your savings. If you are pinching every penny so that you can’t enjoy life and are barely affording your monthly bills, it’s likely that you need to re-evaluate your savings plan. Smaller savings over a longer period are more comfortable to maintain and usually end up yielding more over time.
- Stick to a Budget. Always ensure that you know how much money you have coming in, and what you are spending it on each month. Again, you can and should set aside money for doing fun things like going out to eat or going on a mini-vacation. But living outside of your means is a surefire way to spend beyond your budget and find yourself in a difficult situation when it’s time to make the down payment on your house.
- Get a Side Job. While it may sound daunting to consider picking up more work, there are plenty of ways to make a little extra cash on the weekends or during off-work hours, and some of them might even be fun for you. If you have any applicable skills and are interested in teaching, you may consider tutoring or providing music lessons. Or maybe you have neighbors who need some help around the house with cleaning or walking their dog. There are tons of options to make some extra money to put into savings, and many of them don’t require a big commitment.
- Immediately Put Unexpected Earnings Away. It can be tempting to spend a big bonus on something fun or an extravagant dinner out. However, it’s a good idea to immediately save this money in order to save for emergencies and, of course, for your house down payment.
If you’re getting ready to buy a house, it would be helpful to consult with a qualified mortgage professional to make sure you have a good savings plan in place.