Tips to Help You Save for a Down Payment

Saving for a down payment may seem like a near impossible task, but it can definitely be done. To help you save up for a sizeable down payment, check out these simple money saving tips.

Easy Ways to Save for a Down Payment

Homeownership is a dream for many, but it can become a reality fast if you know how to go about it. An important step you have to take before looking for a home is getting your finances in order and saving up for a down payment. If you feel like you'll never be able to save up enough for a down payment, these tips from Schutt Law can help you get there faster.

Start With a Goal

In order to avoid having to purchase private mortgage insurance when buying a house, you'll have to make a down payment of at least 20%. Before you start looking for a home, figure out what your home buying budget is so that you can then figure out how much 20% of that is. Once this figure is clear, this should be your savings goal. It's a great idea to start a savings account where you can keep this money separate from the rest of your savings. You'll also have to figure out how much money you can transfer into this account each month to figure out how long it will take you to reach your goal. Do your best to stay on track so that reaching your goal doesn't feel impossible.

Cut Back on Expenses

This may not be something you want to do, but if you want your savings to accumulate faster, this is a great strategy. If you don't have a budget for your monthly expenses, this is a great place to start. Set a budget for things like monthly bills, groceries, outings, etc. This will let you see how much you're spending and pinpoint the areas where you can make some cuts. You don't have to save every penny you earn, but there are bound to be areas where you can make some sacrifices for now. For example, if you tend to eat out often, cut back on these outings and only go out to dinner a couple of times a month. If you spend a lot on new clothes each month, consider not going on so many shopping trips. You may miss these luxuries for a bit, but after a while, this will be the new normal and you'll save for your down payment faster.

Save Your Extra Income

Now that you've figured out how much of your monthly income you'll put towards your down payment savings, now it's time to consider any extra money you have coming in. If you get commission at work, consider putting all of this towards your down payment savings. Other extras, like a bonus, your tax return, or money from a freelance job, should also be put directly towards your down payment. While these may not seem like the biggest savings, they can help reduce the amount of time you spend saving up. Since you've done the hard work to save up for a down payment and a home in general, be sure your investment is protected by purchasing title insurance in Fort Myers at closing. With title insurance, you won't' have to worry about title issues coming up and putting your investment at risk. If you have any title insurance questions you want answered, contact Schutt Law at (239) 540-7007.

Pay off Debt

If you still have some debt you haven't paid off, you're better off waiting until after this has been cleared to purchase a home. Since debt will drain part of your monthly income until it's gone, you'll have more trouble saving and getting a home loan. It's also worth mentioning that getting rid of your debt can help improve your credit score, leaving you in a better financial position when it comes time to shop around for a mortgage.

Look for Assistance Programs

Many people have no idea that there are federal programs that can help them when purchasing their first home. For example, if you're a veteran, a VA loan or similar program can help with your down payment or even make it so that you don't have to make a down payment. If you're moving to a rural area, you may qualify for a USDA loan which can help with the purchase of your home. The National Homebuyers Fund also offers provides down payment assistance for qualifying first time home buyers, so it's worth checking out if you qualify.

Get Title Insurance in Fort Myers

After all the work you did to save up for your home, be sure your investment is protected by purchasing title insurance in Fort Myers. To find the best title insurance rates, contact the title insurance experts at Schutt Law. Give them a call at (239) 540-7007 to learn more.