Purchasing a home is an exciting life moment. In order to reduce the stress and anxieties commonly associated with purchasing a home, it’s important that you assess your finances and ensure that you’re in a position to make such a large investment.
At Mortgage Forces, we understand how important it is to save for a down payment. The more money you can allocate towards your down payment, the lower your mortgage and subsequent interest rates will be. The following article will explain three ways in which you can save for a down payment.
Focus on The Investment
When the time comes to save for a new home, you need to be all in on financial savings. This means taking an in-depth look at your spending habits and making significant adjustments that will keep more money in your pocket at the end of the day.
Consider your spending tendencies – do you eat out at restaurants frequently? Are you paying for monthly subscriptions (i.e. Netflix, YouTube Premium, Amazon Prime, etc.) that you barely use? Do you plan yearly vacations that cost thousands of dollars? Committing to a frugal budget will allow you to save for a down payment and improve your financial situation.
Sell One of Your Cars
If you and your spouse/partner each have a vehicle, you should strongly consider selling one of them as it could save you thousands of dollars. Vehicles are expensive to maintain; consider all of the costs that come with vehicle ownership: maintenance fees, auto insurance, vehicle registration, gasoline, etc. Over the course of a year, you could save up to $10,000 by selling one of your vehicles!
If possible, consider taking alternative modes of transportation! Carpooling with coworkers or taking the city bus or riding a bike to work will save you lots of money in the long run.
Pay Off Existing Debts
Before you can think of saving for a down payment, ensure that you have no existing loans or debts to pay off. First and foremost, pay off any loans or debts that carry high-interest rates. Missed payments on loans with high-interest rates will only cause you financial hardship and stress, which you don’t need as a homeowner. Consumer debt also makes it harder for you to receive a mortgage pre-approval successfully.
Saving for a down payment can be tough if you’re not used to saving and budgeting your money, but it’s achievable if you try! These are just three of the ways you can save money and increase the down payment for your new home. For more information, feel free to contact Mortgage Forces today.