Important Things To Know About Saving For A House
Saving For A House Information
Saving for a house is a goal for many people. The dream of owning your own home is very motivating to create a financial plan that will make that dream possible.
Typically the goal in saving for a house is to have an amount equal to 20% of the purchase price. So if the home you buy cost $200,000 you would want to save $40,000 as a down payment. That is not to say you cannot buy a home without a 20% down payment, it is just what lenders like to see. It is also the point where you would be required to purchase private mortgage insurance which guarantees you won't default. Additionally, you can find lenders who will give you a mortgage with 10% down or even nothing down but you will be given higher interest rates.
When you want to buy a house, the down payment you need to save may seem daunting even overwhelming at times but it is achievable. Owning your own is worth the efforts that may be involved in a home saving fund.
Ten Best Tips For Saving For A House
- Create a savings plan. Write everything down because putting it on paper make it more real. Something about the visual effect of writing it down helps you stay focused. You will need to know how much you want to save and this can give you targets to shoot for.
- Make a budget with financial goals and stick to it until you have reached your down payment goal.You have to be honest about your spending habits so you make a budget that is trut to life.
- Cut down your expenses a little at a time and always save the savings. Clipping coupons, cutting down on restaurant dining or car-pooling all give the chance to save some extra money. Its a snowball effect and when you keep saving it the money grows.
- If you have an option to save money in a big way take it. This will greatly increase the balance when saving for a house. Whether it may be moving to a cheaper location or living with your parents, take advantage of the opportunity to save big chunks of money.
- Take a second job for the sole purpose of saving for a house. Make sure all the money goes toward your down payment and nothing else.
- Always make your money hard to get. Put it in places that do not have easy access.
- If you find yourself recieving a lump sum of money such as from a lottery win, income tax refund or gift immediately place it in you saving for a house fund.
- Make sure you invest your money so that it works for you in high yield accounts such as money markets or certificate of deposits. This way you will receive good intrest but also can have access to your money at any time.
- If you have direct deposit from your place of employment, set up a plan where a percentage of your paycheck is directly deposited right into your saving for a house account.
- Before you buy anything question yourself if you really need it? If you do buy it, put the same amount of money into a savings fund for your house. You will see how that money adds up and you will have it for your house.