Saturday, November 26

How You Should Save for Your First House Down Payment  

Purchasing a home is a massive endeavor. Your house will likely be the most expensive thing you ever buy, so planning ahead and making sure that you are as prepared as possible is extremely important.

A key component of buying a home and maintaining reasonable mortgage payments, is the ability to make a solid down payment on the house.

In this guide, we will review some of the best tips and ways to save for your first house down payment so that you can be less stressed about the process.

  1. Your Down Payment Should be at Least 20% of the Home’s Value

A consistent theme when it comes to homebuying is the 20% down payment rule. In order to qualify for a good mortgage rate, you’ll want to save 20% or more of the home’s value for your down payment.

  1. Find Ways to Realistically Save

Depending on your individual situation, you may have some unique opportunities to save money for your down payment. However, you shouldn’t save so much that you can’t enjoy life. It’s still important to spend some money here and there on a treat for yourself and your family. Being unrealistic in your savings can lead to unhappiness and a worse outcome in the long run.

  1. Save Any Unexpected Earnings

You should never count on experiencing any windfalls throughout the course of your savings journey. However, sometimes people have lucky breaks and receive a huge sum of money due to a promotion, an inheritance, or a bonus.

Resist the urge to spend this money on something unnecessary. Save as much of these unexpected earnings as you can so that you can make a bigger payment on your house. You’ll be glad you did down the road when you pay off your house earlier than you ever dreamed you would.

  1. Cut Back on Unnecessary Spending

We’re all guilty of paying for a monthly subscription that we never use. Cut these extra costs out of your life! It’s important to take a look at your monthly payments and determine what is necessary, used frequently, and worth it to keep paying. Anything that doesn’t fall into those categories should be removed from the equation so that you can add more money to your down payment fund.

  1. Save Money for Emergencies

While we’ve discussed down payment savings at length thus far, it’s also important to note that you should save money for any unexpected tragedies. Unfortunately, terrible things can happen throughout life. If and when they do, you’ll want to be sure you have some money reserved for just such occasions.  This should be separate from your down payment savings so that if you need this money in a hurry, you won’t have to resort to taking money from your down payment savings.

  1. Work with a Mortgage Professional

Remember, thesre are plenty of people who can help you with the down payment savings process. Mortgage professionals are experts in the housing field and they are standing by to take your call right now. They will ensure you follow all of the proper steps so that you are sitting in your new dream home in no time at all. The professionals at Rex Homes have also provided this helpful guide on how to save on their blog here: https://blog.rexhomes.com/down-payment-savings-guide/