Many Americans think renting is their future. Why? In part, at least, because coming up with enough money to put down on a home can be tough.
However, owning a home can become a reality for you. All it requires is dedication and some financial savvy. While a number of conventional mortgages require a down payment of 20% of the home’s purchase price, there are mortgage programs with a down payment of as little as 3.5% — or even less!
Whether you have just started saving, or have been saving for a home for a while, here are some great ways to help boost your down payment fund:
1. Take an inventory of your expenses. Even if you live paycheck to paycheck, chances are good there are at least one or two items you can do without. For example, do you pay a monthly subscription to Netflix, Hulu or Spotify? While monthly payments of $10 or $15 might not seem like that big of a deal on their own, they can quickly add up. Consider any subscription or luxury service you can do without. Canceling now doesn’t mean you have to cancel forever, it merely frees up some extra cash you can put toward buying a home. You can apply this mindset to your eating habits as well. For example, cutting back on restaurant meals and trips to Starbucks can yield some significant savings over time. And little practices like these quickly add up.
2. Establish a budget. Budgets are lifesavers because they help you determine how much money you can spend every week. There are necessary expenses such as rent, food and utilities, and then there are miscellaneous expenses like entertainment and vacation. Establishing a budget provides a guideline to ensure you don’t spend above your means. If it’s easier, go to the ATM on Sunday night and take out all of the cash you’ll need for the week. With cash in hand, you’ll always know how much you have left to spend.
3. Open a high-yield savings account. A high-yield savings account is like a traditional savings account, but it yields higher interest. This means you get a higher return on your money and better results over time. There is a wide variety of high-yield savings accounts available. It’s recommended you meet with your personal banker to determine what type of high-interest savings account will best meet your needs.
4. Start a side hustle. The gig economy is transforming the way Americans make money. Thanks to platforms like Uber, Lyft and PostMates, making a couple hundred dollars a week isn’t just possible, it’s easy. Hours are flexible and you can work as little or as much as you want. Give it a try. You might really like what you discover!
5. Don’t let anything get in the way of your goal. Many Americans think buying a home isn’t possible. Forget the naysayers! No matter your background or budget, you can achieve your dream. USDA loans, FHA loans, 203(k) loans and veterans loans all provide access via unconventional means.
If you dream of owning a home and want to take the first step toward making it a reality, call our office today at (623) 523-7139. We look forward to working with you!
