7 Ways To Save Money To Buy A House
Start Saving to Buy a House Now
There are literally thousands of ways to save money to buy a house. With many ways to buy a house, purchasing a home is not as difficult as you may think.
First of all, you must understand that you “can’t have it all,” so discontinue that form of thinking. You must make sacrifices to buy a house and think of it as an investment for life. This should help to motivate you
You must make some sacrifices if you want to save money to buy a house. There are many ways to purchase a home with a number of home buying programs.
You must curtail your spending in other areas. Home prices are up all over the country. But you can still find affordable housing in the way of a cosmetic fixer (that is a fixer with no major repair problems), or a home with an anxious seller.
It takes skill to buy a house, but you can find that in these tips.
To buy a house understand the monthly payment of P+I+T+I, translated, this is the principle, plus interest, plus taxes, plus insurance, which, added together, equal the total monthly payment.
In order to buy a house, you must put down a down payment and pay additional escrow costs. Learn more here.
Understanding the P+I+T+I for different loan amounts will enable you to better prepare for homeownership. For example, if you could afford $1400, the total for a P+I+T+I monthly payment.
Determine what home cost would fall into this price range. Your mortgage broker will assist you.
Search the Internet or anonymously call mortgage companies for quotes. To purchase a home there are home loans that require 0%, 3%, 5%, and 10% down, plus the closing cost. There are many different home buying programs available.
The lower the down payment, the better your credit should be, to get a reasonable interest rate. The standard down payment is about 10% plus escrow and closing costs. It is a good idea to calculate escrow or closing costs upfront.
You will either pay a down payment or points (toward interest rates). The lower the down payment the higher your points to buy a home or vice versa, depending on your home buying program.
Ideas for saving for your new home could include:
1. Selling a car or furniture for the new home buyer
Many of us have an extra car or a car with excessive monthly payments, insurance, and gas. Sell the car you are not using, or in the case of the overly expensive car, sell it to purchase an affordable model.
2. Get a part-time job and save the money as your new home buying check
You can create income for your home purchase. Even if the job is every other weekend, it will help. The money adds up fast, adding an additional $400 a month will end up adding $4800 to your home buying fund.
That amount of money is substantial for a new home buyer in many of today’s markets.
3. Temporarily discontinue a whole host of unnecessary things for serious homebuyers:
Saving money for home buying is a serious endeavor. If you are serious, you will not miss any of the things that bring you immediate joy. You will instead think of the long-term joy you will get as a new homebuyer.
Here is a list of things to discontinue if you are a serious homebuyer. Movies, parties, vacations, clothes, cable TV, voice mail, newspaper, and excess clothes shopping. You can think of more.
4. Use your tax return:
Put your tax return in the bank toward a down payment on your new home. After purchasing your new home, speak with an accountant. Find out how many more exemptions you can take during the year with your new home.
The accountant will tell you how to adjust your exemptions in order to get the money during the year to help with your new home payment if you are over-paying your taxes during the year.
You can use your future excess taxes (or home deduction) toward your current monthly payments.
5. Use a windfall, such as an inheritance or large bonus:
Take this money and place as much as you can afford toward your down payment. There are many unexpected windfalls, everyone has them at various times. Be ready to save your windfall toward buying a house, just in case.
6. A few of you can live with your parents or in-laws while saving money for your homebuying fund:
There are a few parents or in-laws who will be willing to work with you. If you are willing to give your family a low monthly rent, this helps them and you.
That is, if you are not willing to live with them for free it takes a burden off of both of you, and you don’t feel like you are freeloading.
For example, if regular rent is $1200 dollars a month, offer your relative $600 a month and save the additional $600 a month. In a year you would have $7200 to contribute to your homebuying fund.
7. Ask for cash as gifts to add to your homebuying fund:
When you have a birthday, graduation, wedding, or any other celebration, explain to family members in advance that you are saving for a home. Request that you prefer cash gifts.
You can do this over and over and in no time you will have a substantial amount of money to add to your homebuying fund.
Purchase a home when you understand financing options and costs to buy a house. Your down payment and escrow costs can vary depending on many factors.
There are many ways to save money to buy a house, so don’t be dismayed. There are many home buying programs to assist you in buying a house the right way. Use this information too.
Having a side gig and saving your tax refund are the techniques that I am using to save for an upgraded house.
I wish I had a cash windfall, but I will make it work without one 🙂
Who knows Kevin, someone may leave you something you don’t know about!
I know a lot of people who have moved back in with their parents to save up money for a house.
That is a good idea, as long as they pay some rent.
These are great tips and many I never thought of. Been looking for additional ways to save for the beach home I really want. Thanks!
Thank you Erika.
These are great ideas for potential home buyers.