In today's market, you should have at least 5% percent of a home's purchase price for a down payment. This means a $150,000 home could require $7500 down plus closing costs. If you saved $313 a month for the next 24 months, you'd achieve that goal. On the surface, that may seem difficult—but it's not. Make some short-term sacrifices now to save for a down payment on a house.
If you don't have a budget, now is the time to create one. Examine each line item and ask yourself, “What can I do to reduce this amount?”
Move to a Smaller Place
Give up that extra bedroom for the short term. If you rent in a premium location, consider moving to a less expensive area. It may take you a little longer to commute, but it won't be for long. Reduce the amount you are paying in rent by $160, and you will be halfway to your monthly goal.
Take a Part-Time Job
Become a barista at your local coffee shop. Become a yoga instructor at your gym (maybe you can get the gym membership for free). Offer babysitting or pet-sitting services to friends and neighbors. Scour thrift stores and yard sales for great finds, and then sell the items on eBay. Find something you enjoy doing, and then find a way to earn a little money doing it in your spare time.
Maximize Your Windfalls
Financial windfalls (cash gifts, bonuses and tax refunds, for example) tend to get lost in the monthly spending shuffle. Deposit these funds directly into your savings account. If you receive regular structured settlement payments, consider selling your future payments for a lump sum of cash now. You could then put the money toward your down payment.
Agree on a Plan
Once you determine which sacrifices you will make, ensure that everyone affected buys in on the plan. Revisit the plan each month to insure you are on track. Don't be afraid to talk about the pitfalls or complain about the sacrifices. This is the time to reassure each other you are in it for the long haul. Before you know it, you'll be discussing paint colors for the living room.
Written by Realty Times Staff on Thursday, 24 April 2014
Edited and Reposted by Lisa VanderLoo
Great info on everything real estate.