5 Ways to Get Down (Your home payment that is!)

Advanced Systems Homes knows it’s not easy saving money. Especially for a new home down payment. Typically, a down payment is combined with a mortgage loan to help reach a home’s total purchase price. The more money you can put toward your down payment, the smaller the loan you’ll need; the smaller the loan, the smaller your monthly payments will be. This is easily said, but given the day to day challenges on your budget, hard to do.

The first step is to set your goal. How much do you have to save? Depending on the type of mortgage loan you and other factors, such as your credit score, the amount of a down payment will vary. Typically, you can expect to find down payments in the range of 3% – 20% of the purchase price of your new home. Here are some other tips to follow that will help get that down payment quicker:

 1. Create a budget and timeline. First, decide how much you want to save for your down payment. You can contact our experts for help. Then, create a household budget and calculate how much you can comfortably save each month to help you reach that goal.

2. Open a separate down payment savings account. Use this account exclusively for savings toward your down payment. Also, it’s a good idea to make your monthly contributions automatic. People find they’re less likely to dip into this money when they’re light on cash if they keep it in a separate account. This also signals to the prospective lending institution that you are reliable and serious.

3.Reduce major monthly expenses. Shop around and compare rates on monthly charges such as insurance, Internet and cell phone plans, you can find deals or promotions that allow you to save hundreds of dollars per month – savings you can put into your down payment fund! Let your friends and neighbors know what you are saving for and get their ideas and recommendations on how to cut costs.

4.Monitor spending. What gets measured gets managed. Are you buying a cup of coffee every day? Measuring the little things can reveal where some of the petty cash is going and can help when you need to cut. With online banking, you can see where most of your discretionary income is going and easily identify areas where you can cut back. Put the extra money you save into your down payment fund.

5.Track your progress. Saving over a long period of time and staying focused on the goal can be a challenge. Put your petty cash savings into a jar and make a deposit into your dedicated home savings account once per week. Keeping your progress in front of you (create a chart or log) can give your motivation a much-needed boost if thoughts like “we’ll never get there” start to creep in.

If you have read this far you are obviously serious about buying your new home. Advanced Systems Homes can build and place it in as little as 90 days. Contact us to begin designing your homestead and keep saving!