Have you decided it’s time to try to buy a home? Are you trying to save money for your down payment? Here are some tips to help you!
One of the first things to do is figure out a budget. Think about what you want in a home and what you are comfortable with in a house payment. I always remind clients that just because you can qualify for a certain payment, doesn’t mean you should spend it. When we calculate numbers to give you a mortgage approval, we are just giving you what you qualify for. I tell clients to think about their life and what they spend money on – hobbies, vacations, etc. Once you know what you are comfortable with in a house payment, start saving. One easy way is if the house payment is more than your current housing expense, put aside the extra money over your current home expenses. That money can go towards your down payment and closing costs.
Once you know your budget, remember to pay yourself first. By putting money towards your goals, you can build your savings account faster. Pay yourself as soon as you get your paycheck. Then pay your bills. There may be times you have an emergency, if so, you will have money set aside to cover that emergency. Ideally you would have an account set up for an emergency fund and another one for your house savings. I know it’s not always possible to do this, but even a little bit monthly can help.
Look at your budget and see if you can cut any expenses. Think about what you spend at the grocery store (I know these days it can be a lot!). See if you can cut costs at the store. Eating at home instead of going out can save you money. Maybe plan a “staycation” this year instead of going somewhere.
Remember to check into down payment assistance programs. There are a lot of programs that can help with your down payment. MN Housing is one option for those that need help with the down payment. We have a program that could give you a grant of up to $4000 depending on your income and program type. There are other programs in different cities and counties that can help with down payments, some are forgiven after a certain time frame. Make sure you talk with a loan officer that is familiar with down payment assistance programs, not every loan officer works with them.
One of the best ways to figure out what you need to buy a home is to talk with a loan officer and see what you can qualify for and what you might need. You may be closer than you think to buying a home. Once you know what you need, work on saving to that goal – it may take less time than you expect!
Leslie Vanderwerf, NMLS ID#335509, CrossCountry Mortgage LLC, An Equal Housing Lender, NMLS#3029 – Email – Website
