Saving for a down payment on your home can be a stressful experience. You’ve already probably been working hard for years trying to save up and having your sights focused on getting out of the apartment or townhome lifestyle and investing in something a little more personal and comfortable. If you follow these few simple tips, you’ll be well on your way to securing a down payment and being approved for your first home!
Open a savings account
You should plan on opening a savings account at the same bank or credit union that you normally do your checking. It’s simply more convenient to do all your work at one institution instead of having to go all over town to get things done. However, most banks will allow you to transfer funds between one another fairly easily. This should always be your first step in planning for a downpayment.
Plan Out A Budget
Budgeting is one of the most important parts of the home buying process. There really isn’t a point in looking at homes until you know exactly what you’re able to afford. And it’s important to note that what a bank tells you you can afford may be different than what you believe you can afford, so it’s always better to underestimate than to overestimate. In other words, look for homes that are at the lower end of your price range rather than the higher end. If you find something that you like that is at the higher end, you can do more research to see if it’s affordable.
Some of the things you’ll need to take into consideration when planning your budget are taxes, home insurance, mortgage, down payment, and any home renovation costs. Once that is done, you can determine exactly how much you’ll be paying for a down payment. 20 percent down payment is usually ideal because you’ll avoid having to pay private mortgage insurance.
Many People have a lot of trouble determining where they could save money, especially when they’re already living paycheck to paycheck. The answer to this is to start by reducing expenses anywhere possible. Ideally, you’ll want to reduce your expenses by at least 10 or 20 percent. It’s important to take into consideration all expenses throughout your daily life, no matter how big or small they are. For example, if you’re spending 500 dollars a month on groceries, try reducing this to 400. Just keep in mind that saving money is a marathon, not a sprint. This means you’re going to have to stick to these money-saving techniques for months on end.
Contact Paradise Realty
When you’ve finally saved up enough money for a down payment, you need a realtor you can trust. Paradise Realty are your Top Rated Local® Real Estate Experts in Los Banos and we understand the areas real estate market better than practically anyone, ensuring that you get the best possible value for your new home. Ready to get started? Contact us today.