4 Tips for Improving Your Savings Plan for a Home Down Payment

Saving for a down payment can take quite a bit of time and effort. If you’re willing to implement a few clever strategies, though, you can make it both faster and easier.

Here are four tips for improving your savings plan for a home down payment.

Start by Knowing What You Need

When setting a saving goal, it’s important to have a specific number in mind.

Figure out how much you’re likely to spend on a home, then plan to save 20 percent of that.

Although it’s more than you’re actually required to put down, a 20 percent down payment will let you get around private mortgage insurance and may help you secure a lower interest rate on your loan.

Find Extra Room in Your Budget

In any budget, you’ll find at least a few unnecessary expenses that could be cut out to make saving easier.

Eating out less often, buying essential groceries in bulk, and reducing your impulse purchases are all simple, effective ways to put more money back over the course of a year.

You should also try to retire some of your other debts since you can then put the money you were previously paying toward credit cards or car loans into your down payment fund.

Find Ways to Make Extra Money on the Side

One of the best ways to rapidly increase your savings is to pick up an extra source of income on the side.

Freelancing, working a part-time job, or even driving for Uber and Lyft can all be great ways to make a couple of hundred extra dollars each week.

Extra money is especially useful if you’re looking at a luxury real estate like those sold by John Hook Team: KYRO Real Estate.

Luxury homes tend to run at high prices, so you’ll need more money in your account to reasonably buy one.

You can also use your extra income stream to pay off the house ahead of schedule once you’ve purchased it.

Put Any Windfalls Into Your Down Payment Fund

Whenever you receive a tax refund, bonus at work, or cash gift, you should immediately put the money into your down payment savings fund.

These extra sums can add up over time, allowing you to build up your savings more quickly.

This is especially true if you get a large annual bonus at work, which can put a few thousand extra dollars into your fund in some cases.

With these four tips, you can start saving money for your down payment today and have a significant fund within a couple of years.

Keep in mind that your income may rise as you’re saving up, in which case you should adjust the amount you’re setting aside to reflect your new earnings.

Tags: Buy Your First Home, Down payment, Saving For A Home

Category: Housing