Paul Stonkus' Blog
When considering becoming a homeowner, one of the decisions you can make that will be beneficial to you is to deposit a down payment. However, the question is how do save up that hefty down payment?
One of the biggest roadblocks for prospective home buyers is securing a down payment. Fortunately, though, technology seems to be playing a huge factor in shrinking the burden of down payment. The whole saving process has become quite a bit less rigorous.
Below is a list of how you can overcome the down payment hurdle and ensure you have enough money when it’s time for you to buy.
Save A Fixed Amount Every Month
Saving a fixed amount is the simplest and most convenient way to save money. Open a savings account and discipline yourself to pay in a certain sum into the account every month. Discipline yourself not to use the money for any other purpose aside for your down payment.
Save a lot more than you spend, review your expenses and cut down on items that are not necessary. Whatever money generated as a result of this should be added to your down payment account.
Skip Vacations for A Year
I know going for a vacation during the year is something you are looking forward to and you have it all planned out. However, if you are looking to save up enough money for your down payment, then you should consider scrapping out vacation until you have enough money for your down payment.
Reduce Your Debt
Having a credit card with a high interest rate can limit your ability to save. Pay off your interest debt starting with the highest; after that, you can close off that card while you proceed to pay off the next.
Borrow from Your Retirement Plan
You can ask human resources or your payroll officer if it’s possible to borrow against your savings to buy a home. Many profit sharing setups make provisions for employees to loan a certain amount from their retirement plan to become a homeowner.
Borrow from A Relative
When it comes to getting a home of your own, most family members and relatives would be willing to help; they can grant you loans without interest, gifts and other non-monetary items that will help you in your down payment quest.
Get Another Source of Income
Getting a second job would mean you would probably be working round the clock, but in the long run, it would pay off. Getting another job means another source of income and more money to save into your down payment accounting.
Finding your new home is an exciting new prospect, and you want to ensure you get the home you really want. Before you start your home-search take some time to thoroughly consider what you want and need out of a home, what you want it to look like and what features you desire in your neighborhood and the surrounding area. To get you started, here are some pointers for creating your ideal home checklist.
- Basic Requirements. What do you need in a house? Take inventory of your household needs and belongings to determine your basic desires, outside of the obvious roof over your head, running water and electricity. If you have multiple children, do you want them to have their own rooms? Do they need a bathroom they can share? Does your elderly parent live with you and need a ground floor room with easy access to the kitchen and living spaces? Maybe you’re a single professional or young couple focused on starting a new business, so space for a home office or workshop is at the top of the list. Number of rooms, bathrooms, size of the yard, features and layout of the kitchen, storage space and number, size or openness of living areas are all things to consider when developing your needs list.
- Desires. What do you want in a house? Separating needs and wants can be difficult when dreaming of your new home. Start with the big and more obvious ones, like a pool or built-in barbecue, crown molding or a chef’s kitchen. You can add many features that you want after the fact. You can install a pool, replace the sliding door with French doors and even add your own crown molding. Setting aside some wants initially can open up your budget to purchasing a home that you can then invest more funds in and install most of the features you want. If you’re not interested in putting additional work into the house once you move in it is helpful to see what features bring up the cost of your new home so you can start thinking about what you can live without when it comes down to crunching numbers and staying within your means.
- Take it or leave it. You have your list now consider what items you entirely can’t live without (from the want or need category) and what you can be more flexible on. Unless you’re building a home from scratch with the perfect budget to boot, you will have to be flexible when searching for your home. Not every house will have every single feature on your list. Is it the master bath with his and her sinks that you need? Is it a big yard with a tree perfect for your kid’s treehouse, or is it a multi-story home with den and living room that are your most sought-after features? Finally, determine which features to keep on the list to help with future resale value, even if they aren’t on your initial needs or wants lists.
- Resale Potential. The things you aren’t thinking of. Where does potential resale value fit into your overall home buying plan? You might love a home with vintage French windows, but a house with dual-pane windows might add more value to the home when you try to sell it later. Maybe you don’t care about hardwood floors, or you aren’t thinking about ample built-in storage space, but your future buyers are, and you have the opportunity to invest now in added value later. When you review your ideal home checklist with your real estate agent ask for advice on how your needs and preferences align with a future resale.
Before you start your home search or dive too deep into online listings work with your real estate agent to hammer out your ideal home checklist. Once you know what you desire in a home start working with your agent to find the best area for you to live in, read on to part two of this article to create your ideal neighborhood checklist.