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How To Save For a Down Payment in 7 Steps

How To Save For a Down Payment in 7 Steps

posted in Mortgage News

Putting as much money as you can afford towards a down payment, is one of the most important things you can do, as this will have a direct impact on the amount you need to borrow, and what financing options you qualify for. That said, saving for a down payment isn’t always easy, and many struggle to find the right strategies to get them started.

If you’re trying to save money for a down payment, here are 7 steps you can take to make the process easier, and put as much money aside for it, as you possibly can:

  • 1. Have a clear, achievable goal

    Once you’ve found out how much money you’ll need to be able to afford the kind of property that you want, you can start planning around that target. If you need help with this, you can ask an experienced local mortgage broker, who will be familiar with the properties in your chosen area and can assist you with finding a realistic target.

  • 2. Try to streamline your regular expenses

    Once a mortgage broker has helped you find a realistic target to reach, you can beginning lotting out your monthly expenses and trying to find ways to reduce them.

  • 3. Tailor a budget that’s easy to stick to

    By using the following ratio: 50/30/20 in which 50% of your income is for your needs, 30% is for your wants, and 20% is for savings or debt repayment, you may be able to strike a more manageable budget.

  • 4. Have your savings automated

    Nowadays, the majority of banks enable you to automatically transfer a portion of your pay cheque to another account, helping to keep you on track for your down payment goals by reducing your spending.

  • 5. Think carefully about any vacations you take

    It’s important to be able to take time out from everyday life and the many stresses that often go along with it, by going on a vacation, but remember that these can easily (and quickly) eat into your savings. Wherever possible, downgrade your options to avoid blowing your budget on a vacation, which might have felt great at the time, but which will take you one step further away from getting the home that you want.

  • 6. Try to supplement your income

    Whether you take on a second job, or rent out a spare room, any extra money that you can make, will help you reach your goal quicker, or enable you to make a bigger down payment.

  • 7. Consider asking for help

    Many people don’t like to ask family members for financial assistance, but it can help you under the circumstances, and oftentimes, they are grateful to be able to assist you. However, it’s important to remember that lenders will need to verify the source of your down payment, so if you are given any money by a friend or family member, it must be in the form of a gift, not a loan.

With some careful planning, determination and guidance from an experienced mortgage broker, you can save what you need for a down payment, and be on the way to owing a beautiful new home.

 

Mortgage News

05 dJul, 2022

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