Buying a house is one of the most exciting – and intimidating – experiences in life. While there is certainly plenty to look forward to when it comes to owning your own place, there are also major financial hurdles that must be cleared first.
Perhaps the biggest of those hurdles is saving for a down payment. You’ll almost certainly need to make a down payment of some kind in order to secure financing and purchase a house, but how do you build up that balance in your bank account, and just how much do you need? Let’s take a closer look below.
Establish a Goal
It’s hard to get anywhere when you don’t have a clear goal in mind for what you are trying to accomplish. So, rather than just saying that you want to save some money for a down payment, put a specific number on that goal to give yourself a target. That way, the task won’t feel perpetual – it will be something you can track and look forward to the day when you hit the magic number.
To figure out how much of a down payment you’ll need for the kind of house you want to purchase, consider reaching out to a lender in the area. It’s often necessary to have 20% of the purchase price available as a down payment, but other loan options with lower requirements may be available to you.
Put the Money Somewhere Else
You might find it easier to accumulate savings toward this goal if you put the money in a different location than the rest of your funds. Try opening a separate savings account that you can easily add deposits to month after month. When the money isn’t mixed in with the rest of the money that you use for day-to-day living, it will feel “off-limits” and you’ll be less likely to dip into it for other purchases.
Build a Tight Budget
There are almost certainly going to be some sacrifices required if you are going to make progress towards this savings goal. But what should you sacrifice? It’s hard to make that decision unless you have a clear budget in front of you to use. With a budget that you can rely on to make decisions, it will be easier to see where your money is going – and it will be easier to decide which expenses you should skip in favor of saving as much as possible.
Look for Supplemental Income
Cutting expenses can only go so far, as you will always need to pay for things like rent, food, insurance, etc. So, while you are trying to save up to buy a house, think about picking up a part-time job or some other form of supplemental income to add to what you bring in. It might not be ideal to have to work more hours throughout the week, but when you think about how it could help you secure a house of your own, doing so will start to feel like an opportunity instead.
Are You Ready to Move?
Scott Communities has been creating stunning Arizona neighborhoods for decades. If you are ready to move or just want to explore your options, get in touch with us today to learn more. Thank you for stopping by!